Refer to the information provided in Table 14.4 below to answer the question that follows.
Table 14.4B's Strategy
?Raise PriceDon't Raise Price?RaiseA's profit $6,000A's profit $20,000?PriceB's profit $6,000B's profit $30,000A's Strategy????Don'tA's profit $30,000A's profit $10,000?RaiseB's profit $20,000B's profit $10,000Refer to Table 14.4. Firm A?s optimal strategy is
A. dependent on what Firm B does.
B. to raise the price of its product.
C. to not raise the price of its product.
D. indeterminate from this information, as no information is provided on Firm A?s risk preference.
Answer: A
You might also like to view...
In which of the following situations would reliance on expert opinion as a basis for a managerial decision be most preferred?
A) When the product can be packaged with a variety of price and quality combinations. B) When the business in question serves as a supplier of inputs to other businesses, especially in multi-product situations where other strategies may be prohibitively expensive. C) When the level of economic activity can have a significant effect on the demand for the firm's output. D) When the product being marketed is relatively new.
Goods that are not rival in consumption include both
a. private goods and common resources. b. club goods and public goods. c. common resources and public goods. d. private goods and club goods.
Which of the following would tend to shift the supply of dollars in the market for foreign-currency exchange in the open-economy macroeconomic model to the right?
a. the exchange rate rises b. the exchange rate falls c. the expected rate of return on U.S. assets rises d. the expected rate of return on U.S. assets falls
Figure 4-7
Refer to . Which of the following is true for the tax illustrated?
a.
The tax increases the price of gasoline by $.60.
b.
Since the demand for gasoline is more inelastic than the supply, consumers bear most of the burden of the tax.
c.
Since the demand for gasoline is more elastic than the supply, consumers bear most of the burden of the tax.
d.
Since the supply of gasoline is highly inelastic, the primary burden of the tax is imposed on the suppliers of gasoline.