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)
Chapter10: Cost Functions
Section: Chapter Questions
Problem 10.3P
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