Consider an industry with two firms producing similar products. Each firm's total cost (in dollars)is given below. Mega Corp: TC = 5,000 + 100Q
Big Inc: TC = 4,000 + 200Q
When each firm produces 8 units, ________ has a lower total cost, and when each firm produces 12 units, ________ has a lower total cost.
A)Big Inc; Mega Corp
B)Mega Corp; Big Inc
C)Big Inc; Big Inc
D)Mega Corp; Mega Corp

Question

Quizplus · Accepted Answer

At 8 units, Mega Corp's total cost is $5,800 and Big Inc's total cost is $5,600. At 12 units, Mega Corp's total cost is $6,200, and Big Inc's total cost is $6,400.

Consider an Industry with Two Firms Producing Similar Products