Use the Following to Answer Questions

question 14

Multiple Choice

Use the following to answer questions:
Figure: Marginal Costs 1
-(Figure: Marginal Costs 1) This figure shows the production costs of two firms that produce steel beams. If these two firms represent total production in the industry, how should they allocate the production of 100 beams to minimize costs?

• A) Firm 2 should produce all of the output.
• B) Firm 1 should produce all of the output.
• C) Firm 1 should produce 50 beams, and Firm 2 should produce 50 beams.
• D) Both Firm 1 and Firm 2 should produce some output, but Firm 2 should produce more than Firm 1.

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Definitions:

Short-Term Thinking

A focus or emphasis on immediate gains or results, often at the expense of long-term benefits.

Overconfidence

Overconfidence refers to an individual's unwarranted belief in their own abilities or the correctness of their judgement, often leading to mistakes or failures.

Nonprogrammed Decisions

Decisions made in response to unique, novel, or complex situations that require a custom-tailored approach.

Group Decisions

The outcome or resolution reached through a process of deliberation and discussion among members of a group.