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A Radio Manufacturer Has Two Plants -- One in Taiwan

Question 103

Multiple Choice

A radio manufacturer has two plants -- one in Taiwan and one in California.At the current allocation of total output between the two plants,the last unit of output produced in the Taiwan plant added $8 to total cost,while the last unit of output produced in the California plant added $6 to total cost.In order to maximize profit,the firm should


A) keep the allocation between plants unchanged.
B) produce all its output in the Taiwan plant.
C) produce all its output in the California plant.
D) switch some output from the California to the Taiwan plant.
E) switch some output from the Taiwan to the California plant.

Correct Answer:

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