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Calculating output level of second plant

A firm has two plants with the following marginal cost functions: MC1 = 20 +2Q1, MC2 = 10 +5Q2
Where MC1 is marginal cost in the first plant, MC2 is marginal cost in the second plant, Q1 is output in the first plant and Q2 is output in the second plant.

a.If the firm is minimizing its cost and if it is producing 5 units of output in the first plant, how many units of output is it producing in the second plant?

b.Explain

Solution Preview

a.If the firm is minimizing its cost and if it is producing 5 units of output in the first plant, how many units of output is it producing in the second plant?

MC1=20+2Q1=20+2*5=30

Put ...

Solution Summary

Solution describes the steps to calculate output level of the second plant.

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