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Peter Belington Stereo, Inc. supplies car radios to auto manufacturers and is going to open a new plant. The company is undecided between Detroit and Dallas as the site. The fixed costs in Dallas are lover due to cheaper land costs, but the variable costs in Dallas are higher because shipping distances would increase. Given the following costs-
Dallas Detroit
Fixed Costs $600,000 $800,000
Variable Costs$28/radio $22/radio
A. Perform an analysis of the volume over which each location is preferable.
B. How does your answer change if Dalla's fixed costs increase by 10%?
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The technique that estimates long-run costs and the minimum efficient scale by determining the scale of operation at which most firms in an industry are concentrated is called the-
According to dictionary.com, the term change is defined as follows: -verb (used with object) 1. to make the form, nature, content, future course, etc., of (something) different
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