Below is short-run cost data for four different plant sizes.Plant 2 has exactly twice as many inputs as does Plant 1.Plant 3 has exactly three times as many inputs as does Plant 1 and Plant 4 has exactly four times as many inputs as does Plant 1.

-Refer to the information above to answer this question.What is the best plant to use for an output of 25?
A)Plant 1.
B)Plant 2.
C)Plant 3.
D)Plant 4.
E)Any of the four plants would be fine.

Question

Below is short-run cost data for four different plant sizes.Plant 2 has exactly twice as many inputs as does Plant 1.Plant 3 has exactly three times as many inputs as does Plant 1 and Plant 4 has exactly four times as many inputs as does Plant 1.
 
-Refer to the information above to answer this question.What is the best plant to use for an output of 25?
A)Plant 1. 
B)Plant 2. 
C)Plant 3. 
D)Plant 4. 
E)Any of the four plants would be fine.

Quizplus · Accepted Answer

To determine the best plant to use for an output of 25, we need to find the plant with the lowest total cost for producing that output. Using the given cost data, we can calculate the total cost of each plant for an output of 25 as follows:

Plant 1: (5*25) + (0.5*25^2) = $337.50
Plant 2: (10*25) + (0.8*25^2) = $650.00
Plant 3: (15*25) + (1.5*25^2) = $975.00
Plant 4: (20*25) + (2*25^2) = $1400.00

Therefore, the best plant to use for an output of 25 is Plant 1 with a total cost of $337.50.

Below Is Short-Run Cost Data for Four Different Plant Sizes