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You produce widgets for sale in a perfectly competitive market at a market price of $10 per widget. Your widgets are manufactured in two plants,
You produce widgets for sale in a perfectly competitive market at a market price of $10 per widget. Your widgets are manufactured in two plants, one in Massachusetts and the other in Connecticut. Due to changes in the labor market in Connecticut, you are allowed to lower wages there, so that marginal costs in that plant decrease. In response to this, should you shift production and produce less in your Massachusetts plant? Due to the lower marginal cost of production at the Connecticut plant, you should 6) A. not shift production to the Massachusetts plant. but you should increase production in the Connecticut plant until that plant's marginal cost of production equals price. 0 B. shift production away from the Massachusetts plant until the marginal cost of production at the two plants is equal. 0 0. not change production at either plant. 0 D. decrease production at the Massachusetts plant until the marginal revenue of the total amount produced is equal to the marginal cost of production there. O E. not shift production to the Massachusetts plant, but you should reduce production in the Connecticut plant until that plant's marginal cost of production equals marginal revenue
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