A firm with two plants,A and B,has the following estimated demand and marginal cost functions: What is the firm's total marginal cost function?

Question

A firm with two plants,A and B,has the following estimated demand and marginal cost functions:  What is the firm's total marginal cost function?

Quizplus · Accepted Answer

We can find the total marginal cost function by adding the marginal cost functions of the two plants, which are:

MC1 (plant A) = 24 + 1/50Q1
MC2 (plant B) = 56 + 1/30Q2

To get the total marginal cost function, we add these:

MC = MC1 + MC2
MC = (24 + 1/50Q1) + (56 + 1/30Q2)
MC = 80 + 1/50Q1 + 1/30Q2
MC = 80 + (3/150)Q1 + (5/150)Q2
MC = (80/15) + (1/15)Q

Therefore, the answer is C.

A Firm with Two Plants,A and B,has the Following Estimated