What is the resulting total cost

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The manager of Green Chemical Co. has been informed that this year’s production target Q for organic fertilizer (in millions of tonnes) is 20. The manager is asked to allocate the production across the company’s two plants. The average total cost and marginal cost curves for each plant are described as follows: Plant A: ATC{A}= (20/q{A})+4 ; MC{A} = 4 Plant B: ATC{B}= ((5/q{B})+(q{B}/4)) ; MC{B} = q{B}/2 where ATC and MC are in dollars per million of tonne; and A q is the quantity produced (in millions of tonnes) by Plant A and B q is the quantity produced (in millions of tonnes) by Plant B. a) Graph the marginal cost curve for each plant. b) How should the manager allocate the production between the two plants so as to minimize total cost? What is the resulting total cost?

Reference no: EM13976935

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