If Equal Amounts Are Added to the Numerator and the Denominator

question 267

Multiple Choice

If equal amounts are added to the numerator and the denominator of the current ratio and the ratio is over one, the ratio will always

• A) increase.
• B) decrease.
• C) stay the same.
• D) equal zero.

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Definitions:

Cournot Duopoly

A market situation where two firms compete with one another by deciding on output quantity with the assumption that the other's decision remains constant.

Rivals

Competitors within the same market that vie for customers and market share by offering similar goods or services.

Reaction Curve

Relationship between a firm’s profit-maximizing output and the amount it thinks its competitor will produce.

Nash Equilibrium

A concept in game theory where no participant can gain by unilaterally changing their strategy if the strategies of the others remain unchanged.