Answer to Question #72872 in Microeconomics for test
Altrix makes a line of high tech tools that are used to repair medical devices. The company has been
asked to produce a new tool that would require a metal spring they do not currently make. Before they
accept the contract for the new tools, managers must decide whether to make the spring in a part of the
factory that is currently idle, or buy it pre-made from another company. The contract is for 8,000 tools,
and each tool needs a spring.
To create new tools the company needs a spring, but the company must first study the complexity of development, the availability of production opportunities and the profitability of the production of springs in their production. And if the results of the research are positive then you can start manufacturing at your place.