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Given this information find the correct answer. Imagine that you're using both factories and suppose that at the quantities produced, MC1>MC2. For example, marginal cost
Given this information find the correct answer. Imagine that you're using both factories and suppose that at the quantities produced, MC1>MC2. For example, marginal cost at the first factory is 10, while at the second factory its 15. This can't minimize costs because I can make one less unit at factory 2 (save $15) and one more unit at factory 1 (add $10 of costs), get the same output, and save $5 in the way. Conclusion: all factories actually producing must equalize their marginal costs. Suppose you have 2 factories. In the first, marginal cost is always $4. In the second, marginal cost is always $5. There are no fixed costs, and no shipment costs for the finished product. What is correct? Question 1 options: You should always produce in both factories You should never produce in both factories You should produce in both factories if some customers are very far from the factory with $4 marginal costs None of the other answers is correct
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