You are the executive of two factories in China that manufacture shoes. The combined monthly output of both factories is to be 10,000 pairs of shorts.

1. Explain the cost of production including cost in the short run, cost in the long run, long run versus short-run curves, production with two outputs - economies of scope, dynamic changes in cost - learning curve, and estimating and predicting cost?
2. How you would best divide this output of 10,000 pairs of shoes between the two plants.

Pindyck, Robert S., and Daniel L. Rubinfeld. Microeconomics. 9th