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A manufacturing company wishes to enter a new market. By the end of next year, the market leader will have produced 16,000 units on an 80 percent learning curve, and the yearend price is expected to be $475/unit. Your manufacturing personnel tell you that the first unit will require $7,150 to produce and, with the new technology you have developed, you should be able to perform at a 75 percent learning curve. How many units must you produce and sell over the next year in order to compete with the leader at $475/unit at year end? Is your answer realistic, and what assumptions have you made?
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