Suppose That a Firm Can Produce Its Output at Either

question 36

Multiple Choice

Suppose that a firm can produce its output at either of two plants. If profits are maximized, which of the following statements is true?

• A) The marginal cost at the first plant must equal marginal revenue.
• B) The marginal cost at the second plant must equal marginal revenue.
• C) The marginal cost at the two plants must be equal.
• D) all of the above
• E) none of the above

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Definitions:

Mental Grouping

The cognitive process of categorizing objects or information based on shared attributes or relations, aiding in understanding and memory.

Prototype

An original model or first form from which other forms are copied or developed.

Category

A class or division within a system of classification in which members share certain characteristics or attributes.

Prototype

A preliminary model or early sample of a product that serves as an example or basis for designing subsequent forms or versions.