A Firm Has Two Plants, X and Y

question 104

Multiple Choice

A firm has two plants, X and Y. Suppose that the cost of producing x units at plant X is dollars and the cost of producing y units of the same product at plant Y is given by dollars. If the firm has an order for 3,000 units, how many should it produce at each plant to fill this order and minimize the cost of production? ​

• A) 1,500 at plant X; 1,500 at plant Y
• B) 2,500 at plant X; 500 at plant Y
• C) 1,000 at plant X; 2,000 at plant Y
• D) 3,000 at plant X; 0 at plant Y
• E) 2,000 at plant X; 1,000 at plant Y

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Definitions:

Length

The measurement of something from end to end or the extent of something along its greatest dimension.

X

Often used to represent an unknown quantity or variable in mathematical equations and expressions.

Markup Rate

The percentage increase on the cost price of goods to achieve the selling price.

Selling Price

The amount for which a product or service is sold to the purchaser.