Multiple Choice
The VCR manufacturing business is perfectly competitive.Suppose that currently, firms that manufacture VCRs utilize either technology 1 or technology 2,whose cost functions are
TC1(Q) = 340 - 20Q + Q2
TC2(Q) = 405 - 30Q + Q2
In the long run, assuming no new manufacturing technologies,what will happen in this industry?
A) Firms utilizing technology 1 and firms utilizing technology 2 will stay in business.
B) Firms utilizing technology 1 will stay in business, but firms utilizing technology 2 will shut down.
C) Firms utilizing technology 1 will shut down, but firms utilizing technology 2 will stay in business.
D) Firms utilizing technology 1 and firms utilizing technology 2 will shut down.
E) None of the above.
Correct Answer:
Verified
Correct Answer:
Verified
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