Table 17-19 Consider a Small Town That Has Two Grocery Stores from Stores

question 191

Multiple Choice

Table 17-19
Consider a small town that has two grocery stores from which residents can choose to buy a loaf of bread. The store owners each must make a decision to set a high bread price or a low bread price. The payoff table, showing profit per week, is provided below. The profit in each cell is shown as (Store 1, Store 2) .
-Refer to Table 17-19. If grocery store 2 sets a high price, what price should grocery store 1 set? And what will grocery store 1's payoff equal?

• A)Low price, $400
• B)High price, $325
• C)Low price, $50
• D)High price, $400

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Definitions:

Capital Gain

The profit from selling a capital asset for more than its purchase price.

Dividends

Payments made by a corporation to its shareholders from the earnings of the company, usually in the form of cash or stocks.

Shares

Holdings in a corporation or financial asset, these units confer rights to an equitable distribution of dividends from declared profits.