T.W. Smitty is confi dent that demand for his Smart Rap album will substantially exceed the break even point computed in Problem 6.3, so T.W. is contemplating having his album cut at a classier (and pricier) studio. The recording costs would rise to $9000. However, since this new studio works with very high volume, production costs would fall to $2 per vinyl album.

a. What is the breakeven point for this new process?

b. Compare this process to the process proposed in the previous problem. For what volume of demand should T.W. choose the classier studio?