Refer to the Following

question 7

Multiple Choice

Refer to the following:

A firm with two factories, one in Michigan and one in Texas, has decided that it should produce a total of 500 units of output in order to maximize profit. The firm is currently producing 200 units in the Michigan factory and 300 units in the Texas factory.

At this allocation between plants, the last unit of output produced in Michigan added $5 to total cost, while the last unit of output produced in Texas added $3 to total cost.


-In order to maximize profit, a firm that total output between the two plants so that produces its output in two plants will allocate

• A) marginal cost is equal for the two plants.
• B) marginal revenue is equal for the two plants.
• C) marginal cost for the firm is equal to the sum of the plants' marginal revenue.
• D) both a and b
• E) all of the above

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Definitions:

Adrenal Glands

Endocrine glands located on top of each kidney that secrete more than 30 different hormones to deal with stress, regulate salt intake, and provide a secondary source of sex hormones affecting the sexual changes that occur during adolescence.

Pancreas

An organ in the digestive and endocrine system that produces enzymes for digestion and hormones such as insulin for blood sugar regulation.

Melatonin

A hormone produced by the pineal gland in the brain that regulates sleep and wakefulness.

Pineal Gland

A small endocrine gland in the brain that produces melatonin, which regulates sleep-wake cycles and seasonal functions.