Merowak Missiles has developed its Democratizer Offensive Weapon System (DOWS) for the US military. After sinking $1 billion into R&D and design, it spent $0.5 billion building the tools and production facility that are unique to DOWS production. It houses these in standard factory floor space that costs $1 million. Each missile has a marginal cost of $2,000. The Pentagon is thinking of discontinuing the program because the missiles are too expensive. If Merowak were to get an order for 50,000 missiles, what would its breakeven price be?
Business
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