Exhibit 7-1
-Refer to Exhibit 7-1. If it is determined that output should be 3 units and Firm B produces the first 2 units, for efficiency it does not matter if the third unit is produced by Firm A or Firm B.

Question

Exhibit 7-1 
-Refer to Exhibit 7-1. If it is determined that output should be 3 units and Firm B produces the first 2 units, for efficiency it does not matter if the third unit is produced by Firm A or Firm B.

Quizplus · Accepted Answer

According to the exhibit, both Firm A and Firm B have the same marginal cost, so it does not matter which firm produces the third unit for efficiency.

Exhibit 7-1 -Refer to Exhibit 7-1. If It Is Determined That Output