A Small Firm Manufactures Maple Baseball Bats in Two Small

A small firm manufactures maple baseball bats in two small production facilities, with the following marginal cost and average total cost equations:

-Refer to the scenario above. Now suppose the plant is sold to a new owner with an undergraduate degree in economics and an MBA in finance. The new owner plans to follow the profit-maximizing rule (produce the level of output at which Marginal Cost = Price) rather than equalize production across both plants. Under this new guidance, production levels at each firm are ________. Explain your answer.

A) Produce 45 units of output at Plant 1 and shut down Plant 2
B) Produce 45 units of output at Plant 1 and produce 40 units of output at Plant 2
C) Produce 45 units of output at Plant 1 and produce 45 units of output at Plant 2
D) Produce 40 units of output at Plant 1 and 40 units of output at Plant 2