Business, 29.02.2020 04:45 sharondot8523

A newly formed firm must decide on a plant location. There are two alternatives under consider- ation: locate near the major raw materials or locate near the major customers. Locating near the raw materials will result in lower fixed and variable costs than locating near the market, but the owners believe there would be a loss in sales volume because customers tend to favor local sup- pliers. Revenue per unit will be $185 in either case. Using the following information, determine which location would produce the greater profit.

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