Use the following information to answer Questions 39 - 43
Jim's Production is planning on acquiring a competitive firm with a view to change production technologies.The two firm technologies produce the same output but with different cost functions.Jim's Production technology has a cost function = 1000 + 0.10Q whereas the competitor's cost function = 500 + 0.15Q.
-Which firm has higher marginal costs?
A)Jim's Production
B)Competitor's production
C)They both have the same fixed costs
D)Need more information

Question

Quizplus · Accepted Answer

The marginal cost is represented by the coefficient of Q in the cost function. As the competitor's cost function has a higher coefficient for Q, it implies that their marginal cost is higher.

Use the Following Information to Answer Questions 39 - 43