Refer to the information in Scenario 8.1. If Fizzle and Sizzle sell th

Refer to the information in Scenario 8.1. If Fizzle and Sizzle sell the same output at the same price and are otherwise identical, Fizzle’s profit will be

A) higher than Sizzle’s by $500,000 yearly.
B) higher than Sizzle’s by just less than $500,000 yearly.
C) zero in the long run, and Sizzle will be out of business.
D) the same as Sizzle’s, because Fizzle must be assigned an implicit cost of $500,000 yearly for economic rent.
E) the same as Sizzle’s, because Sizzle will move to a more advantageous location in order to compete.

ANSWER

D