Question

09 Question (1 point) 1st attempt Feedback See Hint A manufacturer of fine pens produces in two plants. The total cost of producing in the first plant is given by TC1 = y + 100. The total cost of producing in the second plant is given by TC2 = " + 200. In these cost functions, y1 corresponds to the number of pens produced in the first plant, and y2 corresponds to the number of pens produced in the second plant. Suppose the firm is producing 4 pens in the second plant. If the firm is minimizing costs, total costs for the firm must equal $® 4 .(Give your answer to two decimals.)

Answer 1

When total cost is minimized marginal costs in both plants should be same

MC1 = MC2

2y1 = y2^2

Here y2 = 4 (given)

2y1 = 4^2

y1 = 8

Hence, y1 = 8 and y2 = 4

Total cost = y1^2 + 100 + y2^3/3 + 200

= 8^2 + 100 + 4^3/3 + 200

= $385.33

Cost is 385.33