When making output decisions, managers of firms producing a joint product with fixed proportions need to pay attention to the separate prices of the joint goods.

Question

Quizplus · Accepted Answer

In the case of joint products produced in fixed proportions, the decision to produce more of one product automatically means producing more of the other, so managers focus on the combined revenue from both products rather than the separate prices.

When Making Output Decisions, Managers of Firms Producing a Joint