According to the Exchange Model of Production, When Two Firms

question 2

Multiple Choice

According to the exchange model of production, when two firms are in competitive equilibrium

• A)the MRTS for two firms will be equal
• B)the marginal products of capital and labor for each firm will be equal.
• C)both firms will demand proportional quantities of labor and capital
• D)the prices of labor and capital will be at the lowest possible level.

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Definitions:

Clayton Act

A U.S. antitrust law enacted in 1914, aimed at promoting competition by preventing mergers and acquisitions that could potentially reduce competition.

Market Share

The portion of a market controlled by a particular company, often expressed as a percentage of total sales in that market.

Patentable Technologies

Innovations or inventions that meet specific criteria for novelty, non-obviousness, and utility, thus eligible for patent protection.

Market Extension Merger

A merger between companies in different markets that sell similar products or services, aiming to expand their market reach.