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Two firms, A and B, both produce widgets. The price of widgets is $1 each. Firm A has total fixed costs of $500,000 and variable
Two firms, A and B, both produce widgets. The price of widgets is $1 each. Firm A has total fixed costs of $500,000 and variable costs of $0.50c per widget. Firm B has total fixed costs of $240,000 and variable profits of 75c per widget. The corporate tax rate is 40%. If the economy is strong, each firm will sell 1.200,000 widgets. If the economy enters a recession, each firm will sell 1,100,000 widgets. if the economyenters a recession, the after-tax profit of firm a will be?
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