Gce Model Questions Vol1 2019 Geography Question 50

A firm is deciding between two possible sites for a new factory, Site X and Site Y. The fixed annual cost at Site X is £20 000. Variable costs per unit are the same for both sites, but transport cost per unit to market equals \(0.05\) £ per km multiplied by the distance to market, and labour cost per unit equals \(0.02\) £ per km multiplied by the average employee commute distance. Site X is 120 km from the market and the average employee commute is 15 km. Site Y is 80 km from the market and the average employee commute is 30 km. The firm expects to produce 10 000 units per year. If the fixed annual cost at Site Y is set so that the total annual cost at both sites is the same, what should be the fixed annual cost (in £) at Site Y? Give your answer rounded to the nearest pound.