Table 17-11 Only Two Firms, ABC and XYZ, Sell a Particular Product

question 515

Multiple Choice

Table 17-11
Only two firms, ABC and XYZ, sell a particular product. The table below shows the demand curve for their product. Each firm has the same constant marginal cost of $8 and zero fixed cost.
-Refer to Table 17-11. If ABC and XYZ operate to jointly maximize profits, then what is the price?

• A)$14
• B)$16
• C)$18
• D)$20

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Definitions:

Perpetual Inventory System

An inventory management system where updates are made continuously as transactions occur, maintaining real-time inventory levels.

Journal Entries

The recordation of financial transactions in an accounting system.

After-tax Earnings

The net income a company generates after all taxes have been deducted from gross earnings.

Physical Reductions

Decreases in the quantity or physical state of assets, often associated with inventory or fixed assets through use, wear, and tear.