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.

---

Definitions:

Requirements

Conditions or capabilities needed by a user to solve a problem or achieve an objective that must be met or possessed by a system, product, or service.