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Two firms, C and D , both produce coat hangers. The price of coat hangers is $ 1 . 2 0 each. Firm C has

Two firms, C and D , both produce coat hangers. The price of coat hangers is $1.20 each. Firm C has total fixed costs of $750,000 and variable costs of 30!in per coat hanger. Firm D has total fixed costs of $400,000 and variable costs of 50!in per coat hanger. The corporate tax rate is 40%. If the economy is strong, each firm will sell 2,000,000 coat hangers. If the economy enters a recession, each firm will sell 1,400,000 coat hangers.
If the economy enters a recessioh the after-tax profit of firm C will be
$750,000.
$1,680,000
$204,000.
$510,000.
$306,000.
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