Suppose a Firm Has Two Plants Producing the Same Good

question 82

Multiple Choice

Suppose a firm has two plants producing the same good.Each plant is producing 200 units of the good.In plant A,the short run average cost of production is $20 and in plant B it is $30.If the firm wants to produce a total of 400 units at the lowest cost in the long run,it should:

• A)switch production from plant B to plant A until the average cost of production at each plant is the same.
• B)produce only at plant A and shut down plant B.
• C)switch production from plant B to plant A until the average cost is the same at the two plants.
• D)continue to use the same input ratio.

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Definitions:

Consumer Electronics

Electronic devices intended for everyday use by individuals, such as smartphones, televisions, and laptops.

Prestige Products

Items that are perceived as luxurious and of high quality, often associated with social status.

Shopping Products

Goods that consumers purchase after comparing quality, price, and style from several sellers, implying a more deliberate decision-making and selection process.

Unsought Product

A type of product that consumers typically do not think about buying or do not know exists until they see it or need it.