Home / Questions / Pastry Paradise is looking to expand It decides to take over Sweet Tooth a competitive fir...
Pastry Paradise is looking to expand. It decides to take over Sweet Tooth, a competitive firm. The two firms have similar technology but different costs. Pastry Paradise has $1500 fixed costs and $1 marginal cost per unit produced. Sweet Tooth has $500 fixed costs but $5 marginal cost per unit produced. What is the total cost, at the level of production where Pastry Paradise is indifferent between which technology is used?
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