Question: Suppose there are two types of technology: Technology A allows a firm to produce with variable cost while technology B allows a firm to produce

Suppose there are two types of technology: Technology A allows a firm to produce with variable cost

while technology B allows a firm to produce with variable cost

Technologies A and B are incompatible, that is, a firm can operate with A or B, but not both simultaneously. Technology B is free. Technology A can be acquired at a cost F. If the price of the firm's output is P = 1, for what values of F should the firm choose technology A?

VCAO Q22

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