Suppose a Plant Manager Ignores Some Implicit Marginal Costs of Production

Multiple Choice

Suppose a plant manager ignores some implicit marginal costs of production so that the perceived MC curve is below the actual MC curve. What is the likely outcome from this error?

A) Firm produces less than optimal quantity and earns lower profits.
B) Firm produces less than optimal quantity and earns higher profits.
C) Firm produces more than optimal quantity and earns lower profits.
D) Firm produces more than optimal quantity and earns higher profits.