Question: The fixed and variable costs for three potential manufacturing plant sites for a rattan chair weaver are shown: Site Fixed Cost per Year Variable Cost

The fixed and variable costs for three potential manufacturing plant sites for a rattan chair weaver are shown:

Site

Fixed Cost per Year

Variable Cost per Unit

1

$ 500

$11

2

1,000

7

3

1,700

4

a) Over what range of production is each location optimal?

b) For a production of 200 units, which site is best?

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