The Subject is Micro economics
Based on the table, answer the following questions:
(a) What is the variable cost per unit for both the companies?
(b) How is average cost calculated? Show the calculation.
(c) How do you find economies of scale being applicable in the above example of two companies?
(d) How big will Sony's unit cost advantage be if it sells 2,000,000 units per year, while Nintendo sells only 2,00,000?
(e) Explain, why is Sony having cost advantage over Nintendo?
