Question: A firm can choose between two production technologies for a new product line. If it installs technology 1, its yearly costs will be \(C_{1}(q)=3600+65 q+\) \(36 q^{2} .\) If it installs technology 2, they will be \(C_{2}(q)=900+900 q+q^{2}\)

1. What is the minimum efficient scale with both technologies?
2. Which technology would the firm prefer (purely from a cost standpoint) if it expected to sell 30 units in summer and 10 units in winter each year?
3. What if it were more optimistic about summer sales?
4. When the firm has a decreasing returns to scale and when it has an increasing returns to scale if it uses technology 1?

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