The optimal level of output where products are jointly produced in variable proportions occurs where the marginal cost of production is equal to the vertical summation of the marginal revenues of the individual products.

Question

Quizplus · Accepted Answer

The optimal level of output for jointly produced products in variable proportions occurs where the marginal cost of production is equal to the marginal revenue of each product, not the vertical summation of their marginal revenues. Each product's production level is adjusted until its marginal revenue equals the marginal cost of production.

The Optimal Level of Output Where Products Are Jointly Produced