The Wilcox Company has two plants with the marginal cost functions MC1 = 20 + 2Q1 MC2
Question:
MC1 = 20 + 2Q1
MC2 = 10 + 5Q2
where MC1 is marginal cost in the first plant, MC2 is marginal cost in the second plant, Q1 is output in the first plant, and Q2 is output in the second plant.
a. If the Wilcox Company minimizes its costs and produces five units of output in the first plant, how many units of output does it produce in the second plant? Explain.
b. What is the marginal cost function for the firm as a whole?
c. Can we determine from these data the average cost function for each plant? Why or why not?
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Related Book For
Managerial Economics Theory Applications and Cases
ISBN: 978-0393912777
8th edition
Authors: Bruce Allen, Keith Weigelt, Neil A. Doherty, Edwin Mansfield
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