Focusing only on transportation costs, if a firm pays both the costs of transporting inputs to its plant and the finished product to its customers, the profit maximizing plant location A. minimizes the sum of the two transportation costs. B. can be anywhere between the location of the inputs and of the customers because the firm pays both sets of transportation costs. C. must always be closer to the location of the inputs because transporting inputs is always more expensive than transporting finished products. D. None of the above answers are correct.
Focusing only on transportation costs, if a firm pays both the costs of transporting inputs to its plant and the finished product to its customers, the profit maximizing plant location A. minimizes the sum of the two transportation costs. B. can be anywhere between the location of the inputs and of the customers because the firm pays both sets of transportation costs. C. must always be closer to the location of the inputs because transporting inputs is always more expensive than transporting finished products. D. None of the above answers are correct.
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter7: Production, Costs, And Industry Structure
Section: Chapter Questions
Problem 25RQ: In choosing a production technology, how will firms react if one input becomes relatively more...
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Focusing only on transportation costs, if a firm pays both the costs of transporting inputs to its plant and the finished product to its customers, the profit maximizing plant location
A. minimizes the sum of the two transportation costs.
B. can be anywhere between the location of the inputs and of the customers because the firm pays both sets of transportation costs.
C. must always be closer to the location of the inputs because transporting inputs is always more expensive than transporting finished products.
D. None of the above answers are correct.
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