A Single-Period Duopoly Firm Can Choose Output Level a or B.The

question 95

Multiple Choice

A single-period duopoly firm can choose output level A or B.The firm decides it will produce level A regardless of what the other firm produces.This decision may occur because

• A) producing the output level A is a dominant strategy.
• B) this firm has simply decided to always produce at level A.
• C) Both A and B are possible.
• D) None of the above.

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Definitions:

Manufacturing Overhead

The expenses linked to manufacturing not including direct labor and materials.

Predetermined Overhead Rates

Overhead rates calculated before a period starts by dividing estimated overhead costs by an expected allocation base.

Machine-Hours

A measure of production output or activity based on the number of hours machines are operating in the manufacturing process.

Machining

The process of removing material from a workpiece to shape or finish it using machine tools.