Question

Consider an industry with two firms producing similar products. Each firm’s total cost (in dollars) is given below. Mega Corp: TC = 5,000 + 100Q Big Inc: TC = 4,000 + 200Q When each firm produces 8 units, ______ has a lower total cost, and when each firm produces 12 units, ______ has a lower total cost.

Answer 1

When each firm produces 8 units, Big Inc has a lower total cost, and when each firm produces 12 units, Mega crop  has a lower total cost.

Explanation:

When each product is made 8 units, Big Inc does have a smaller total cost, and when each company produces 12 units, Mega Crop does have a smaller total cost.

A single company producing goods without near competition has a monopoly, whereas an oligopoly market does have an amount limited of extremely large companies producing similar or slightly separate goods. For both cases, the entrance of other businesses is significantly impeded.

By nationalization of a good or service like postal system a government could create a monopoly.