The demand for dishwashers facing the AllClean Co. is given in the figure above. The firm manufactures dishwashers in two plants. MC1 and MC2 are the marginal cost curves for those two plants. How should the firm allocate total output between the two plants in order to maximize profit?
A. 20 to plant 1, 50 to plant 2
B. 10 to plant 1, 40 to plant 2
C. 20 to plant 1, 60 to plant 2
D. 20 to plant 1, 30 to plant 2
E. 40 to plant 1, 40 to plant 2
Answer: B
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Refer to the table above. France will gain from trade so long as the international price of grapes measured in terms of textiles is below
A) $15. B) 3. C) 5. D) 8.
Suppose that international trade is the only kind of international transaction between the United States and Canada. The United States currently is experiencing a balance of trade deficit with Canada. What would happen to the United States and Canadian money supplies if the United States and Canada both used the gold standard?
A) The U.S. money supply would rise and the Canadian money supply would fall. B) Both the U.S. and Canadian money supplies would rise. C) The U.S. money supply would fall and the Canadian money supply would rise. D) Both the U.S. and the Canadian money supplies would fall.
Suppose there is a simultaneous increase in demand and decrease in supply, what effect will this have on the equilibrium price?
A. It will rise. B. It will fall. C. It will remain the same. D. It may rise or fall.
Assume a market price gets set artificially low-that is, it gets set below the equilibrium price. This change means:
A. Some producers drop out of the market, and those left lose some surplus. B. Every consumer gains surplus, due to the lower price now being charged. C. Every producer loses surplus, and it all gets transferred to consumers. D. None of these is true.