(Table: Hanes and Fruit of the Loom T-Shirts I) Payoffs

question 80

Multiple Choice

(Table: Hanes and Fruit of the Loom T-Shirts I) Payoffs represent profits in thousands of dollars. What is the Nash equilibrium?

• A) (20 , 20)
• B) (17 , 17)
• C) (14 , 14)
• D) (19 , 10) or (10 , 19)

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Definitions:

ATC

ATC, or Average Total Cost, is the per-unit cost of production, calculated by dividing the total cost by the quantity of output produced, comprising both fixed and variable costs.

Marginal Cost

The cost of producing one additional unit of a good or service, considered crucial in determining production levels and pricing decisions.

Average Variable Cost (AVC)

The variable cost of production divided by the number of units produced, reflecting the cost per unit excluding fixed costs.

Average Fixed Cost (AFC)

A firm’s total fixed cost divided by output (the quantity of product produced).