firm maximizes profit by setting output at a level where marginal revenue equals marginal cost.
For many firms, production takes place in two
or more different plants whose operating costs can differ. However, the logic used
in choosing output levels is very similar to that for the single-plant firm.
Suppose a firm has two plants. What should its total output be, and how
much of that output should each plant produce? We can find the answer intuitively in two steps.