Refer to the Following Figure Showing the Reaction Functions of Oligopoly

question 31

Multiple Choice

Refer to the following figure showing the reaction functions of oligopoly firms A and B. In Nash equilibrium,

• A)firm A runs 4 ads and firm B runs 7 ads.
• B)firm A runs 7 ads and firm B runs 4 ads.
• C)firm A runs 2 ads and firm B runs 2 ads.
• D)firm A runs 3 ads and firm B runs 5 ads.
• E)none of the above.

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Definitions:

Cash Effect

The impact of any transaction on a company's cash and cash equivalents, indicating how the transaction alters the company's liquidity.

Accounts Receivable

Funds due to a company from its clients for products or services already provided but still unpaid.

Cash Effect

The impact of a business transaction on the cash and cash equivalents held by the company, reflecting how an event affects its liquidity.

Merchandise Inventory

Goods that a retailer, distributor, or manufacturer aims to sell to generate revenue, recorded as a current asset on the balance sheet.