A Competitive Firm Produces Identical Outputs at Two Different Plants

question 23

Multiple Choice

A competitive firm produces identical outputs at two different plants. If the marginal cost at the first plant is above market price and marginal cost at the second plant is less than market price, then to increase profit the firm should

• A)decrease output in both plants.
• B)increase output in both plants.
• C)increase output in the first plant and decrease it in the second plant.
• D)decrease output in the first plant and increase it in the second plant.

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Definitions:

Felony

A serious crime, typically one involving violence, and is more severe than a misdemeanor, leading to higher punishment.

Misdemeanor

A type of criminal offense that is less serious than a felony, usually punishable by a fine, probation, or short-term incarceration.

Mandatory Reporting Law

Laws requiring certain professionals to report cases of abuse, neglect, or other harm to appropriate authorities.

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The legal rules and regulations that are established and enforced by individual states within a country, differing from federal laws.