Suppose That There Are Just Two Firms in a Small

question 26

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.Suppose that Acme and Generic face the same demand function,that they are both pursuing a profit-maximization policy,and that both companies are earning positive economic profits at that quantity.Which statement is true?

• A)Acme will produce more output than Generic.
• B)Generic will produce more output than Acme.
• C)Acme and Generic will produce the same quantity and will have the same profits.
• D)Acme and Generic will produce the same quantity,but Acme will have higher profits.

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Definitions:

Economic Development

The process by which a nation improves the economic, political, and social well-being of its people, typically seen through increases in income, education, and health.

World Bank

A worldwide financial agency offering loans and grants aimed at funding capital improvements in less affluent nations through governmental channels.

International Monetary Fund

An international organization created to promote global economic stability and growth through financial cooperation and assistance.

Agricultural Output

The total quantity of agricultural products produced, including crops and livestock.