The optimal output of joint products that are produced in fixed proportions is found where
A) the vertical sum of the marginal revenue from each product is equal to marginal cost.
B) the horizontal sum of the marginal revenue from each product is equal to marginal cost.
C) the marginal revenue from each product is equal to the marginal cost of producing each product.
D) the marginal cost is equal to the corresponding price of each product.

Question

Quizplus · Accepted Answer

In the case of joint products produced in fixed proportions, the optimal output is determined where the vertical sum of the marginal revenue (MR) from each product equals the marginal cost (MC) of production. This is because the products are produced together, and their combined revenues must cover the shared cost of production.

The Optimal Output of Joint Products That Are Produced in Fixed