Assume one firm separately produces a cola and diet cola drink in two different plants (i.e. factories).Demand is 100 for each product and both plants have fixed costsFand marginal costc. The firm is considering producing both types of drink at one plant.If it does produce both drinks at one plant, it saves on fixed costsFbut incurs switching costsS.Also it incurs additional marginal costs ofrby producing the other version in additional to the base version of the plant.What condition must be satisfied in order for the firm to find it more cost effective to produce at one plant?

a.

F>S+ 200r

b.

F> 2S+ 200r

c.

F>S+ 100r

d.

F> 2S+ 100r