A firm can choose between two production technologies for a new product

line. If it installs technology 1, its yearly costs will be C1(q) = 3600 + 65q +

36q2

. If it installs technology 2, they will be C2(q) = 900 + 900q + q2

.

i) What is the minimum efficient scale for each technology?

ii) Which technology would the firm prefer (purely from a cost

standpoint) if it expected to sell 30 units in summer and 10 units in

winter each year?

pur-new-sol