Suppose That There Are Just Two Firms in a Small

question 18

Multiple Choice

Suppose that there are just two firms in a small market.
Acme Manufacturing's Total Costs equal $100 + $3 × Quantity.
Generic Industries' Total Costs equal $500 + $3 × Quantity.
Refer to the information given above.Compare cost functions at the two firms.Which statement is true?

• A)Acme will always have lower marginal costs than Generic.
• B)Acme and Generic have equal marginal costs.
• C)Marginal costs at each firm will depend on the quantity,or output,of the firms.
• D)Acme has greater economies of scale than does Generic.

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