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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