A competitive firm has a single factory with the cost function c(y)= 4y2 + 89 and produces 28 units in order to maximize profits.Although the price of output does not change, the firm decides to build a second factory with the cost function c(y)= 8y2 + 39.To maximize its profits, how many units should it produce in the second factory?
A)14
B)21
C)9
D)13
E)None of the above.

Question

Quizplus · Accepted Answer

The correct answer is A because the firm should produce 14 units in the second factory to maximize its profits.

A Competitive Firm Has a Single Factory with the Cost