Suppose a hospital has to choose one of two X-ray machines to purchase. One costs $200,000 to purchase, and each image produced by the machine costs $10. The other sells for $250,000, but each image costs only $2. a) What is the fixed cost and marginal cost for the first machine?  b)How many X-ray images must be made before the cost of the two machines becomes equal?

Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter4: Extent (how Much) Decisions
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Suppose a hospital has to choose one of two X-ray machines to purchase. One costs $200,000 to purchase, and each image produced by the machine costs $10. The other sells for $250,000, but each image costs only $2.

a) What is the fixed cost and marginal cost for the first machine? 

b)How many X-ray images must be made before the cost of the two machines becomes equal?

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