Question: How would your answer to question 5 change if: Technological improvements reduce the cost of new BG production facilities by 3 percent per year?

How would your answer to question 5 change if:

• Technological improvements reduce the cost of new BG production facilities by 3 percent per year? Thus a new plant built in year 1 would cost only 25 (1 − .03) = $24.25 million; a plant built in year 2 would cost $23.52 million; and so on. Assume that production costs per unit remain at $65.

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