A Manufacturing Firm Is Considering Two Locations for a Plant

A manufacturing firm is considering two locations for a plant to produce a new product. The two locations have fixed and variable costs as follows: $$\begin{array} { l c c } \text { Location } & \mathrm { FC } \text { (annual) } & \mathrm { VC } \text { (per unit) } \\\hline \text { Atlanta } & \$ 80,000 & \$ 20 \\\text { Phoenix } & \$ 140,000 & \$ 16\end{array}$$ At what annual output would the company be indifferent between the two locations?

A)  60,000 units
B)  15,000 units
C)  10,000 units
D)  20,000 units
E)  4,000 units

Correct Answer:

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