Biology Forums - Study Force

Scenario: A firm wants to set up a factory. It has four different options. The rent of the factory in each of the four different locations and the time taken to transport the product from each location to the market is shown in the table below. The opportunity cost of time is $10 per hour.

Factory Location	Monthly Commuting Time (hours)	Monthly Rent ($)
Very Far	30	2,060
Far	25	2,100
Close	15	2,300
Very Close	5	2,500

Refer to the scenario above. Which is the optimum location for the firm to set up its factory?

▸ Very Close

▸ Very Far

▸ Close

▸ Far

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