Marginal analysis. Help

[avinash77]

Global Corp. sells its output at the market price of $7 per unit. Each plant has the costs shown below:

Units of Output Total Cost ($)
0 10
1 12
2 16
3 22
4 30
5 40
6 52
7 66
How much output should each plant produce?

Please specify your answer as an integer.

[eco aspirant]

Since at zero level of output, there is a loss of 10. Therefore, each plant will try to minimize their respective loss incurred due to production. According to the given schedule, this occurs at 3 units of output where
loss made by each plant = total cost - total revenue
                                    = 22 - 7*3 = 22-21 = 1

Note that at any other level of output, each plant incurs a much greater loss. So, at q = 3 loss is minimized.