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 changes in work rules by Venture Company employees that led to higher worker productivity.The net effect of Venture Company's formation on the welfare of the domestic economy is:

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