Suppose a firm wants to produce 50 units of output at minimum cost and it has three factories with the following marginal cost functions MC,(y1) = 40 MC2(y2) = 4y2 MC3(y3) = 8y3 How should the firm allocate production across their three factories? (Note: if you can't figure out how to do this for three factories, you can do it for factories 2 and 3 for part marks)
Suppose a firm wants to produce 50 units of output at minimum cost and it has three factories with the following marginal cost functions MC,(y1) = 40 MC2(y2) = 4y2 MC3(y3) = 8y3 How should the firm allocate production across their three factories? (Note: if you can't figure out how to do this for three factories, you can do it for factories 2 and 3 for part marks)
Chapter22: Supply: The Costs Of Doing Business
Section: Chapter Questions
Problem 16E
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![2. Suppose a firm wants to produce 50 units of output at minimum cost and it has three factories
with the following marginal cost functions
MC,(y1) = 40
MC2(y2) = 4y2
MC3(y3) = 8y3
How should the firm allocate production across their three factories? (Note: if you can't figure
out how to do this for three factories, you can do it for factories 2 and 3 for part marks)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8c7df49b-72aa-4fd9-9581-6a6b9c0fee16%2F32077432-8bce-41cb-99c2-60949f33967a%2Fv2j268p_processed.png&w=3840&q=75)
Transcribed Image Text:2. Suppose a firm wants to produce 50 units of output at minimum cost and it has three factories
with the following marginal cost functions
MC,(y1) = 40
MC2(y2) = 4y2
MC3(y3) = 8y3
How should the firm allocate production across their three factories? (Note: if you can't figure
out how to do this for three factories, you can do it for factories 2 and 3 for part marks)
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