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Refer to the Graph Shown of Average Costs for a Typical

Question 129

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Refer to the graph shown of average costs for a typical firm. If this industry consisted of one firm producing 1,000 units and one firm producing 500 units: Refer to the graph shown of average costs for a typical firm. If this industry consisted of one firm producing 1,000 units and one firm producing 500 units:   A)  the larger firm probably would be forced out through price competition. B)  the larger firm would earn higher profit than the smaller firm, but they could both survive indefinitely. C)  the smaller firm probably would be forced out through price competition. D)  there is no way to predict which firm would have a competitive advantage.


A) the larger firm probably would be forced out through price competition.
B) the larger firm would earn higher profit than the smaller firm, but they could both survive indefinitely.
C) the smaller firm probably would be forced out through price competition.
D) there is no way to predict which firm would have a competitive advantage.

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