Question
A small island nation produces only boxes of macaroni and cheese, most of which it sells in the export market. The world price per box
A small island nation produces only boxes of macaroni and cheese, most of which it sells in the export market. The world price per box is $10, regardless of the quantity exported. The nation has three macaroni-and-cheese factories, each of which varies in efficiency, but it's impossible for the government to determine each factory's marginal cost. To profit the most as a country, what should this nation's government do?
Group of answer choices
Shut down the two most inefficient factories, and produce at the most efficient one until marginal cost is $10.
Order each factory to produce the same quantity.
Impose a tax on exports and see which factory survives the longest.
Let the producers compete in the market to determine the optimal quantity and allocation of macaroni and cheese production.
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