Cost complementary exits in a multiproduct cost function when
A)the average cost of producing one output is reduced when the output of another product is increased.
B)the average cost of producing one output is increased when the output of another product is increased.
C)the marginal cost of producing one output is increased when the output of another product is decreased.
D)the marginal cost of producing one output is reduced when the output of another product is increased.

Question

Quizplus · Accepted Answer

Cost complementary exits occur when the increase in the production of one output reduces the marginal cost of producing another output. This means that the marginal cost of producing one output decreases when the output of another product is increased, which is option D. Therefore, D is the best choice.

Cost Complementary Exits in a Multiproduct Cost Function When