Figure 9.1.International Joint Venture

Multiple Choice

Figure 9.1.International Joint Venture
-Consider Figure 9.1.Assume Venture Company's formation yields new cost reductions,indicated by MC₁=AC₁,which result from wage concessions accepted by Venture Company employees.The net effect of Venture Company's formation on the welfare of the domestic economy is:

A) No change
B) Gain of $2
C) Loss of $2
D) Loss of $4