What would the annual cost of additional supervision have to be in order for Hadley to be economically indifferent between making or buying the component? (Assume all other conditions stay the same. )
A) $17,000.
B) $18,000.
C) $19,000.
D) $20,000.

Question

Quizplus · Accepted Answer

Hadley's annual cost of making the component is $100,000. The annual cost of buying the component is $117,000. The additional cost of supervision is $17,000. If Hadley is economically indifferent between making or buying the component, then the annual cost of additional supervision would have to be $17,000.

What Would the Annual Cost of Additional Supervision Have to Be