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Consider an Industry with Two Firms Producing Similar Products

Question 55

Multiple Choice

Consider an industry with two firms producing similar products.
Mega Corp's total costs are TC = $5,000 + 100 × Quantity.
Big Inc's total costs are TC = $4,000 + 200 × Quantity.
Refer to the information given above.Average total costs for these firms:


A) declines as quantity increases.
B) increases as quantity increases.
C) is constant for all quantities.
D) declines as quantity increases for Mega Corp and increases as quantity increases for Big Inc.

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