Suppose that a firm can produce its output at either of two plants. If profits are maximized, which of the following statements is true?
A) The marginal cost at the first plant must equal marginal revenue.
B) The marginal cost at the second plant must equal marginal revenue.
C) The marginal cost at the two plants must be equal.
D) all of the above
E) none of the above
D
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If the price of a movie download falls, the rental rate of DVDs ________ and the equilibrium quantity of DVDs rented ________
A) rises; decreases B) rises; increases C) falls; decreases D) falls; increases
China currently has a policy to subsidize grain production to keep farmers' income up. It sets a target price for the state purchase of the grains. Currently the price is higher than the world price. China's policy has led to:
a. Increases in the domestic stocks of grain b. Decreases in the state purchases of grain c. Shortages of grain in China d. Reduction of imported grain for the use in livestock feed e. a and d