Figure 9.1.International Joint Venture
-Consider Figure 9.1.Suppose that Sony Company and American Company jointly form a new firm,Venture Company,whose ball bearings replace the output sold by the parents in the domestic market.Assuming that Venture Company operates as a monopoly and that its costs equal MC₀=AC₀,the firm's price,output,and total profit would respectively equal:

Question

Figure 9.1.International Joint Venture

-Consider Figure 9.1.Suppose that Sony Company and American Company jointly form a new firm,Venture Company,whose ball bearings replace the output sold by the parents in the domestic market.Assuming that Venture Company operates as a monopoly and that its costs equal MC₀=AC₀,the firm's price,output,and total profit would respectively equal:

Quizplus · Accepted Answer

The monopoly price is set where marginal cost equals marginal revenue. Given MC=AC, the firm maximizes profit by producing 2 units at a price of $6, resulting in a total profit of $4.