Both Kate and John Own Saltwater Taffy Factories

question 181

Multiple Choice

Both Kate and John own saltwater taffy factories. Kate's factory has low fixed costs and high variable costs. John's factory has high fixed costs and low variable costs. Currently, each factory is producing 1,000 boxes of taffy at the same total cost. Complete the following statement with the correct answer. If each produces

• A) less, their costs will be equal.
• B) more, their costs will be equal.
• C) more, the costs of Kate's factory will exceed those of John's factory.
• D) less, the costs of Kate's factory will exceed those of John's factory.

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