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kmell12
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A firm's single plant has costs C=160+16Q+.1Q squared and faces the price equation P=96 -.4Q.
i) Explain whether these claims are correct:
The firm's production manager claims that the firm's average cost of production is minimized at an output of 40 units and that 40 units is the firm's profit-maximizing level of output.
ii) Can the firm increase its profit by using a second plant with costs identical to the first to produce total output Q* = 80 units? Explain.
Please provide answers to these questions. Thanks!
i) Explain whether these claims are correct:
The firm's production manager claims that the firm's average cost of production is minimized at an output of 40 units and that 40 units is the firm's profit-maximizing level of output.
ii) Can the firm increase its profit by using a second plant with costs identical to the first to produce total output Q* = 80 units? Explain.
Please provide answers to these questions. Thanks!