Reference no: EM131277428

"Suppose that the only costs involved in car production are the cost of raw materials, the costs of buying robots, and the costs of hiring workers. Raw materials (steel, glass, rubber, textiles) cost $2,000 per car. Robots have an annualized cost of $1,400,000 per year and workers are paid an annual salary of $40,000 per year.

Consider the following two plans of operation. Under plan A, only 1 robot is purchased; then each worker can produce 100 cars per year. Under plan B, 2 robots are purchased; then each worker can produce 500 cars per year. Output per worker depends only on the number of robots purchased and does not depend on how many workers are hired. Firms can choose how many workers to hire.

What is the output level at which the costs under the two plans are equal?

The output level at which the costs under the two plans are equal is ___ cars. (Round the answer to the nearest whole number)"