Suppose That the Cost of Producing X Units at Plant

question 32

Multiple Choice

Suppose that the cost of producing x units at plant X is dollars and that the cost of producing y units of the same product at plant Y is dollars. If the firm that owns the plants has an order for 240 units, how many should it produce at each plant to fill this order and minimize its cost of production? ​

• A) The production of 96 units at plant X and 144 units at plant Y minimizes the production costs.
• B) The production of 144 units at plant X and 96 units at plant Y minimizes the production costs.
• C) The production of 86 units at plant X and 154 units at plant Y minimizes the production costs.
• D) The production of 111 units at plant X and 129 units at plant Y minimizes the production costs.
• E) The production of 154 units at plant X and 86 units at plant Y minimizes the production costs.

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Definitions:

Trustee

Someone legally appointed to manage and administer property or assets for the benefit of another, often used in contexts like bankruptcy, trust funds, and estates.

IRA

An Individual Retirement Account, a financial tool designed to help individuals save for retirement with tax advantages.

Voluntary

An action undertaken by one's own free will without external coercion or undue influence.

Liquidation

The process of converting a company's assets into cash to pay off creditors before dissolving the company.