Use the Table Below to Answer the Following Question

question 3

Multiple Choice

Use the table below to answer the following question.
Table 15.3.1

-Consider the game shown in Table 15.3.1 based on potential gas prices between two competitors. The game is played repeatedly and the result is a cooperative equilibrium. The payoffs in the table show the economic profit of the firms. The most likely outcome is

• A)a cycle of first $0.95/litre, then $1.15/litre, etc.
• B)Hare sets her prices at $1.15/litre, and Turtle sets his at $0.95/litre.
• C)Hare sets her prices at $0.95/litre, and Turtle sets his at $1.15/litre.
• D)both set their prices at $1.15/litre.
• E)both set their prices at $0.95/litre.

---

Definitions:

Manufacturing Overhead

The indirect factory-related costs that are incurred when a product is manufactured, including costs such as maintenance, utilities, and quality control.

Standard Costing System

An accounting method that uses standard costs for product cost planning and control, involving setting predetermined costs for manufacturing activities.

Variable Overhead Efficiency Variance

Measures the difference between the actual hours taken to produce an item and the standard hours expected, multiplied by the variable overhead rate per hour.

Direct Labor-Hours

The total hours of labor directly involved in manufacturing a product or providing a service, which are directly attributable to the cost of creating that product or service.