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CAT Question & Answer Key Resources Grade 10 Mathematics PT and CAT Master Course (Entered in Quill)

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Your friend argues that you should follow a particular cost model when producing a product in order to make a profit. Model A has an initial cost of 100 decreases at a rate of $1 per unit made. Model B has a higher cost of $300 but decreases at an exponential rate of $.05 for each unit made. You friend explains to you that it will cost you more to use Model A until you make 25 units, then less than Mode B when more than 25 units are made. Can you validate your friends claim? If so explain why, if not say why.