Sweet Grams makes graham cracker snack packages. Sweet Grams is a multi- plant firm with two production facilities. The a table summarizes the total marginal cost of production at various output levels in the separate plants. Assume Sweet Grams is a perfectly competitive firm.
-Refer to the table above. If Sweet Grams is a perfectly competitive firm and the market price $1.75 per unit, what is the profit- maximizing quantity for Sweet Grams to produce at Plant 2?

Question

Quizplus · Accepted Answer

To determine the profit-maximizing quantity for Plant 2, we need to look at the marginal cost column and find the quantity where MC=MR (which equals the price for a perfectly competitive firm). At Plant 2, this occurs at a quantity of 32,000 units. Therefore, the profit-maximizing quantity for Sweet Grams to produce at Plant 2 is 32,000 units.

Sweet Grams Makes Graham Cracker Snack Packages