A Competitive Firm Has a Single Factory with the Cost

question 28

Multiple Choice

A competitive firm has a single factory with the cost function c(y) = 4y2 + 89 and produces 28 units in order to maximize profits. Although the price of output does not change, the firm decides to build a second factory with the cost function c(y) = 8y2 + 39. To maximize its profits, how many units should it produce in the second factory?

• A) 14
• B) 21
• C) 9
• D) 13
• E) None of the above.

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Definitions:

Promises Fulfillment

The act of meeting or delivering on the commitments one has made to others.

Technological Progress

Refers to the advancements and improvements in tools, machines, techniques, and software that increase efficiency and capability in various fields such as science, industry, and daily life.

Social Problems

Issues within a society that are recognized by a significant number of people as contrary to their values.

Choice Overload

A cognitive process in which people struggle to make a decision when faced with many options, potentially leading to decision fatigue.