Figure 91 Illustrates the Market Conditions Facing Sony Company and American

Multiple Choice

Figure 9.1 illustrates the market conditions facing Sony Company and American Company initially operating as competitors in the domestic ball bearing market.Each firm realizes constant long-run costs,MC0=AC0.
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:

A) $6,2 units,$4
B) $4,2 units,$2
C) $6,4 units,$4
D) $4,4 units,$2