The green machine manufacturing company has the option to make or buy a component part for one of its lawnmowers. the annual requirement is 30,000 units. a supplier is able to supply the parts for $12.00 per piece. green machine estimates that it will cost $1,000 to prepare the contract with the supplier. to make the parts in-house, green machine must invest $100,000 in capital equipment. they estimate it will cost $8.50 per piece to produce the part in-house.
1. carry all calculations out to two decimal places.
a. what is the breakeven quantity?
b. what is the total cost at the breakeven point?
c. what is the cost savings from making the correct decision?

American gas products manufactures a device called a can-emitor that empties the contents of old aerosol cans in 2 to 3 seconds. this eliminates having to dispose of the cans as hazardous wastes. if a certain paint company can save $75,000 per year in waste disposal costs, how much could the company afford to spend now on the can-emitor if it wants to recover its investment in 3 years at an interest rate of 20% per year?

If delta airlines were to significantly change its fare structure and flight schedule to enhance its competitive position in response to aggressive price cutting by southwest airlines, this would be an example ofanswers: explicit collusion.tacit collusion.competitive dynamics.a harvest strategy.

4. suppose that pollution in a neighborhood comes from two factories, with marginal benefit curves given by mb1 = 12 – p1 and mb2 = 8 – p2. the level of pollution in the neighborhood is given by p = p1 + p2. the government wants to limit pollution by instituting a pollution-rights market. the government’s desired level of p is 10, so it prints 10 pollution rights and offers them for sale to the firms.a)find the equilibrium selling price of a pollution right, as well as the allocation of rights (and hence pollution levels) across the two factories. b)repeat part (a) for the case where the government’s desired level of pollution equals 14. c)comment on the usefulness of a pollution rights market in achieving efficient levels of pollution abatement.