Gce Model Questions Vol1 2018 Geography Question 7
Practice objective / multiple choice question 7 from the 2018 Gce Model Questions Vol1 Geography examination.
Two factories produce the same product and sell each unit for £35. Factory A has fixed costs of £120,000 and a variable cost of £15 per unit for the first 5,000 units; for any production above 5,000 units the variable cost falls by 20 % because of bulk purchasing. Factory B has fixed costs of £80,000 and a constant variable cost of £20 per unit. Determine the smallest whole number of units that must be produced for Factory A to achieve a higher profit than Factory B, and state the profit advantage (in £) of Factory A at that output level.
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About This Question
This is Gce Model Questions Vol1 2018 Geography Question 7. It is one of the objective questions from the 2018 Gce Model Questions Vol1 Geography examination.
Difficulty level: Hard .
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