A firm is deciding between two different sewing machines. Technology A has fixed costs of $500 and marginal costs of $50 whereas Technology B has fixed costs of $250 and marginal costs of $100. At what quantity is the firm indifferent between the two technologies?

5 units

Explanation:

Use equations.

Cost of Producing with Tech A;

= 500 + 50Q

Cost of Producing with Tech B;

= 250 + 100Q

Point of indifference;

500 + 50Q = 250 + 100Q

500 - 250 = 100Q - 50Q

50Q = 250

Q = 5 units

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