Suppose a Plant Manager Ignores Some Implicit Marginal Costs of Production

question 125

Multiple Choice

Suppose a plant manager ignores some implicit marginal costs of production so that the perceived MC curve is below the actual MC curve. What is the likely outcome from this error?

• A) Firm produces less than optimal quantity and earns lower profits.
• B) Firm produces less than optimal quantity and earns higher profits.
• C) Firm produces more than optimal quantity and earns lower profits.
• D) Firm produces more than optimal quantity and earns higher profits.

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Definitions:

Thymine

One of the four nucleobases in the DNA molecule represented by the letter T, pairing with adenine (A).

Guanine

One of the four main nucleobases found in DNA and RNA, which pairs with cytosine in double-stranded DNA.

DNA Codon

A sequence of three nucleotides in DNA that specifies the inclusion of a particular amino acid in a protein or indicates a start or stop signal in protein synthesis.

RNA Codon

A sequence of three nucleotides in RNA that specifies the addition of a specific amino acid during protein synthesis.