Refer to the graph shown of average costs for a typical firm. If this industry consisted of one firm producing 1,000 units and one firm producing 500 units:
A. the larger firm would earn higher profit than the smaller firm, but they could both survive indefinitely.
B. there is no way to predict which firm would have a competitive advantage.
C. the larger firm probably would be forced out through price competition.
D. the smaller firm probably would be forced out through price competition.
Answer: D
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Answer the following statement true (T) or false (F)
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