Added: 3 years ago
From: janczakj
Views: 11,538
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  • We know that iron cost $50/unit (ton), and to make the switch from B-C we will be losing 6 units of iron. When you multiply that out, the company will lose $300. But since they are moving from B-C they are increasing thier steel production by 4 (going from 6 units to 10). SInce the company needs to make up that money that they lost in not producing iron, they need to charge a price for each unit of steel which will get them back to $300. Since there is 4 units, we divide $300 by 4.

  • wouldn't you have to multiply the 4 units by the $50? getting 200 and then dividing the $300 by $200? Why 4 units?

    I got most of it, iam just a little confused on the last part :[

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