Sue and Jane Own Two Local Gas Stations

question 62

Multiple Choice

Sue and Jane own two local gas stations.They have identical constant marginal costs, but earn zero economic profits.Sue and Jane constitute

• A)a Sweezy oligopoly.
• B)a Cournot oligopoly.
• C)a Bertrand oligopoly.
• D)none of the statements associated with this question are correct.

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Definitions:

Direct Materials Quantity Variance

A measure of the difference between the actual quantity of materials used in production and the standard expected quantity.

Direct Labor Time Variance

The difference between the actual time taken to manufacture a product and the standard time expected, multiplied by the wage rate.

Direct Labor Time Variance

The difference between the estimated time for production and the actual time taken, multiplied by the wage rate.

Direct Labor Rate Variance

The difference between the actual cost of direct labor and the standard cost, indicating efficiency in labor usage.