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Suppose That There Are Just Two Firms in a Small

Question 48

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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