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a) On the graph to the right, use the line drawing tool to draw the total cost curve for each option Label the curves TC₂. TC, and TCc, respectively

a) On the graph to the right, use the line drawing tool to draw the total cost curve for each option Label the curves TC₂. TC, and TCc, respectively

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Ski Boards, Inc., wants to enter the market quickly with a new finish on its ski boards. It has three choices: (a) refurbish the old equipment at a cost of $250, (b) make major modifications at the cost of $1,000, or (c) purchase new equipment at a net cost of $1,750. If the firm chooses to refurbish the equipment, materials and labor will be $1.10 per board. If it chooses to make modifications, materials and labor will be $0.75 per board. If it buys new equipment, variable costs are estimated to be $0.40 per board. a) On the graph to the right, use the line drawing tool to draw the total cost curve for each option. Label the curves TC₂, TC, and TCC, respectively. Note: Carefully follow the instructions above and only draw the required objects. Dollars 8,000- 7,5004 7,000- 6,500 6,000- 5,500- 5,000- 4,500- 4,000- 3,500- 3,000- 2,500- 2,000- 1,500- 1,000- 500- 0- to 0 1,000 2,000 3,000 Boards o 4,000 5,000
Transcribed Image Text:Ski Boards, Inc., wants to enter the market quickly with a new finish on its ski boards. It has three choices: (a) refurbish the old equipment at a cost of $250, (b) make major modifications at the cost of $1,000, or (c) purchase new equipment at a net cost of $1,750. If the firm chooses to refurbish the equipment, materials and labor will be $1.10 per board. If it chooses to make modifications, materials and labor will be $0.75 per board. If it buys new equipment, variable costs are estimated to be $0.40 per board. a) On the graph to the right, use the line drawing tool to draw the total cost curve for each option. Label the curves TC₂, TC, and TCC, respectively. Note: Carefully follow the instructions above and only draw the required objects. Dollars 8,000- 7,5004 7,000- 6,500 6,000- 5,500- 5,000- 4,500- 4,000- 3,500- 3,000- 2,500- 2,000- 1,500- 1,000- 500- 0- to 0 1,000 2,000 3,000 Boards o 4,000 5,000
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