A Firm Is Producing 10,000 Units of Output in Two

question 88

Multiple Choice

A firm is producing 10,000 units of output in two plants,A and B,and each plant is producing 5,000 units of output.The marginal cost in plant A is $10 and the marginal cost in B is $6.To reduce the cost of producing 10,000 units the firm should

• A)produce more in A and less in B.
• B)produce less in A and more in B.
• C)produce it all in B because B is the lower cost plant.
• D)do nothing since the output in each plant is equal.

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