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What is the total cost function for each location

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Reference no: EM131383102

1. Four plant locations are under consideration for a new microchip plant.  Here are estimates of the fixed and variable costs at each location.

Location

Fixed cost

Variable cost

A

$3,500,000

$600

B

3,000,000

800

C

4,000,000

500

D

4,500,000

400

a. What is the total cost function for each location?

b. Plot the total cost functions for these locations on the same graph.

c. On the graph, identify the range of output for which each location has the least cost.

d. Which location should be selected for an output of 4,000 chips per year? 12,000 chips per year?

Reference no: EM131383102

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