Question

The cost of setting up a steel mill is enormous. For example, a Gary, Indiana, hot-strip mill would cost an estimated $1.5 billion to build. Using this information and the cost concepts from chapters 11 and 12, explain the following quotation: “To make operations even marginally profitable, big steelmakers must run full-out. It’s like a car that is more efficient at 55 miles an hour than in stop-and-go traffic at 25.” Fully explain! Give me a different answer.

Answer 1