A multiplant monopolist can produce her output in either of two plants. She discovers that when marginal revenue is $50, the marginal cost in plant 1 is $70 while the marginal cost in plant 2 is $75. To maximize profits the firm will

produce more output in plant 1 and less in plant 2.

Explanation:

From the question, we are given the information that a multiplant monopolist can produce her output in either of two plants and that she discovers that when marginal revenue is $50, the marginal cost in plant 1 is $70 while the marginal cost in plant 2 is $75.

Since the marginal cost in plant 2 is higher than that of plant 1, to maximize profits the firm will produce more output in plant 1 and less in plant 2.

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