(Table: Gascolator Producers I) Banner and Sense Are Bertrand Competitors

question 61

Multiple Choice

(Table: Gascolator Producers I) Banner and Sense are Bertrand competitors producing identical gascolators (a main line strainer) . The inverse market demand curve for gascolators is P = 2,000 - 4Q, where Q is the quantity of gascolators and P is the price per gascolator. Banner and Sense produce gascolators at a constant marginal cost of $80. If Banner charges a price of $80 and Sense charges $80, Sense's quantity sold is ____.

• A) 320
• B) 240
• C) 180
• D) 0

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Definitions:

Income Tax Reassessment

The process by which tax authorities review and possibly adjust the amount of income tax payable by an individual or corporation following the submission of tax returns.

Capital Asset

Long-term property or investment that is not easily sold or exchanged for cash without a substantial loss in value.

Consolidated Retained Earnings

The accumulated profits of a corporation and its subsidiaries after dividends have been paid out to shareholders.

Consolidated Statement

A financial statement that aggregates the financial position and operations of a parent company and its subsidiaries, presenting them as a single economic entity.