A Monopolist Owns Two Plants in Which to Produce Product $1 .$

question 11

Multiple Choice

A monopolist owns two plants in which to produce product A. The marginal cost of producing A is increasing, but currently is lower in plant 1 than in plant 2. How should the monopolist allocate production?

• A) Produce all output in plant \(1 .\)
• B) Produce all output in plant 2 .
• C) Produce 50 percent in plant 1 and 50 percent in plant \(2 .\)
• D) Produce in plant 1 up to the point where marginal costs are equated across the plants. (In other words, reallocate production so that \(M C _ { 1 } = M C _ { 2 }\).)

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Definitions:

Union Position

The stance or perspective maintained by a labor union on various issues, including wages, working conditions, and policies affecting its members.

Income Inequality

The unequal distribution of income within a population, leading to disparities in wealth and living standards among different socioeconomic groups.

Labor Movement

A collective organization of working people that seeks to improve wages, working conditions, and workers' rights through various forms of protest and negotiation.

Nonunion Environments

Workplaces where no labor unions represent the workers, often characterized by more direct employer-to-employee relations.