Refer to the Following

Multiple Choice

Refer to the following:

A firm with two factories, one in Michigan and one in Texas, has decided that it should produce a total of 500 units of output in order to maximize profit. The firm is currently producing 200 units in the Michigan factory and 300 units in the Texas factory.

At this allocation between plants, the last unit of output produced in Michigan added $5 to total cost, while the last unit of output produced in Texas added $3 to total cost.


-In order to maximize profit, a firm that total output between the two plants so that produces its output in two plants will allocate

A) marginal cost is equal for the two plants.
B) marginal revenue is equal for the two plants.
C) marginal cost for the firm is equal to the sum of the plants' marginal revenue.
D) both a and b
E) all of the above