You Are the Manager of a Firm That Produces Output

question 72

Multiple Choice

You are the manager of a firm that produces output in two plants.The demand for your firm's product is P = 120 − 6Q,where Q = Q₁ + Q₂.The marginal costs associated with producing in the two plants are MC₁ = 2Q₁ and MC₂ = 4Q₂.How much output should be produced in plant 1 in order to maximize profits?

• A) 3
• B) 6
• C) 9
• D) 12

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Definitions:

Resamples

The practice of drawing repeated samples from a given dataset, often with replacement, to estimate the precision of sample statistics.

Permutation Test

A non-parametric statistical test that assesses the significance of a difference between groups by computing all possible outcomes under rearrangements of labels.

P-value

The probability of obtaining test results at least as extreme as the results observed, under the assumption that the null hypothesis is true.

Test Statistic

A calculated value used in statistical hypothesis testing to determine whether to reject the null hypothesis.