A multiplant monopolist can produce her output in either of two ...

[gbarreiro]

A multiplant monopolist can produce her output in either of two plants. Having sold all of her output she discovers that the marginal cost in plant 1 is 30 while the marginal cost in plant 2 is 20. To maximize profits the firm will
 
  A) produce more output in plant 1 and less in the plant 2.
  B) do nothing until it acquires more information on revenues.
  C) produce less output in plant 1 and more in plant 2.
  D) produce less in both plants until marginal revenue is zero.
  E) shut down plant 1 and only produce at plant 2 in the future.

Question 2

Suppose a technological innovation shifts the marginal cost curve downward. Which one of the following cost curves does NOT shift?
 
  A) Firm's short-run supply curve
  B) Average total cost curve
  C) Average variable cost curve
  D) Average fixed cost curve

[Kimmy]

Answer to Question 1

C

Answer to Question 2

D

[gbarreiro]

Correct answers!

[Kimmy]

Great! Please up vote