A firm produces a good in two factories: one in Tucson and one in Phoenix.Historically,the plants' long-run average costs have been comparable.Engineers have found that output elasticity at the Tucson plant is 1.1,while at Phoenix it is 0.93.A senior production manager has recommended expanding the scale of production in Tucson over the next few years and cutting production in Phoenix.Examine the validity of this proposal.

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The Answer of A firm produces a good in two factories: one in Tucson and one in Phoenix.Historically,the plants' long-run average costs have been comparable.Engineers have found that output elasticity at the Tucson plant is 1.1,while at Phoenix it is 0.93.A senior production manager has recommended expanding the scale of production in Tucson over the next few years and cutting production in Phoenix.Examine the validity of this proposal.

A Firm Produces a Good in Two Factories: One in Tucson