Answer the next question based on the following payoff matrix for two oligopolistic firms in which the numbers indicate the profit in millions of dollars for each firm. Firm A? High PriceLow PriceFirm BHigh priceA = $250A = $325??B = $250B = $200?Low priceA = $200A = $175??B = $325B = $175Assume that firm B adopts a low-price strategy while firm A maintains a high-price strategy. Compared to the results from a high-price strategy for both firms, firm B will now
A. gain $50 million in profit and firm A will lose $75 million in profit.
B. gain $75 million in profit and firm A will lose $50 million in profit.
C. lose $75 million in profit and firm A will gain $50 million in profit.
D. gain $50 million in profit and firm A will lose $50 million in profit.
Answer: B
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Which of the following is TRUE?
a. Maximizing division profits always leads to maximizing company-wide profits b. Managers of profit centers are not given any discretion in their decision making c. Profit centers often largely run by themselves without a lot of executive oversight d. A manager being rewarded on division revenues has no incentive to make good decisions for his division
If the same dairy can produce either whole milk or skim milk, an increase in the profitability of whole milk results in a(n)
a. decrease in the quantity supplied of whole milk b. increase in the supply of whole milk c. decrease in the supply of skim milk d. increase in the supply of skim milk e. decrease in the quantity supplied of skim milk
A new Mexican restaurant opens in the city of Manchester. The residents are happy about this new restaurant because they are experiencing what externality?
Rochelle lost her job as a salesperson when sales fell off during the recession. Now she is looking for a new job. Rochelle is
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