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Southern Copper Corporation is a perfectly competitive copper producer with two mines in southern Peru, the Cuajone and Toquepala Mines. Each mine produces only copper.

Southern Copper Corporation is a perfectly competitive copper producer with two mines in southern Peru, the Cuajone and Toquepala Mines. Each mine produces only copper. Although the purity of the ore is the same, say that the managers have noticed that for the last ton of ore mined, the marginal cost at the Cuajone Mine exceeds the marginal cost at the Toquepala Mine. Are Southern Copper’s managers maximizing the firm’s profit?

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