A monopolist in the radio industry has two radio-making plants. The marginal cost of radio production by Plant A is $4Q (where Q is the number of radios produced) and the marginal cost of radio production by Plant B is always $16. If the demand curve for radios is downward sloping, the monopolist will
A. never produce radios at Plant A.
B. always produce four times as many radios at Plant B as at A.
C. never produce more than four radios at Plant A.
D. produce radios at Plant A only as a last resort.
Answer: C
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