If the Marginal Cost of Production at Firm 1 Is

question 108

Multiple Choice

If the marginal cost of production at Firm 1 is less than the marginal cost of production at Firm 2 but the overall costs of production are lower on average at Firm 2, then:

• A) Firm 2 should produce all of the output.
• B) Firm 1 should produce all of the output.
• C) Firm 1 should produce output up to the point that its marginal costs of production are equal to the marginal costs of Firm 2.
• D) Firm 2 should produce additional output up to the point that its average costs are less than its marginal costs.

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Definitions:

Independent Variable

The variable in an experiment that is manipulated by the researcher to observe its effect on the dependent variable.

Dependent Variable

In experimental and statistical research, the variable that is being tested and measured, and is expected to change as a result of manipulations to the independent variable.

Random Assignment

A method used in experiments where participants are assigned to different groups in a manner that ensures each has an equal chance of being placed in any group.

Experimental Group

A group of participants in a study that receives the treatment or intervention being tested, allowing researchers to assess the effect of the treatment.