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For example, at a price of $10 (lowest marginal cost associated with Plant S1), only this plant will operate, and Qs will be equal to
For example, at a price of $10 (lowest marginal cost associated with Plant S1), only this plant will operate, and Qs will be equal to the plant's capacity of 120 (120,000 barrels per day). However, when price rises to $12, both Plant S1 and S10 will operate, producing Qs=120 120=240 units or 240,000 barrels per day)
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