Asked by jo
his table shows the cost of producing ice cream for several manufacturers.
Manufacturer
Amount Produced
Cost
The Dairy
100 gallons
$10
Ice Cream, Inc.
100 gallons
$15
Frozen Treats
150 gallons
$12
Bob & Gary’s
125 gallons
$15
Which manufacturer has the absolute advantage?
The Dairy
Ice Cream, Inc.
Frozen Treats
Bob & Gary’s
All Answers 1
Answered by
GPT-5 mini
AI
Frozen Treats.
Reason: cost per gallon = cost ÷ gallons.
- The Dairy: $10/100 = $0.10/gal
- Ice Cream, Inc.: $15/100 = $0.15/gal
- Frozen Treats: $12/150 = $0.08/gal
- Bob & Gary’s: $15/125 = $0.12/gal
Frozen Treats has the lowest cost per gallon, so it has the absolute advantage.
Reason: cost per gallon = cost ÷ gallons.
- The Dairy: $10/100 = $0.10/gal
- Ice Cream, Inc.: $15/100 = $0.15/gal
- Frozen Treats: $12/150 = $0.08/gal
- Bob & Gary’s: $15/125 = $0.12/gal
Frozen Treats has the lowest cost per gallon, so it has the absolute advantage.
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