Which of the Following Statements Is True in General About

question 9

Multiple Choice

Which of the following statements is true in general about firm actions that are strategic substitutes?

• A)Reaction functions are downward sloping & the more of the action one firm chooses, the more of the action the other firm chooses
• B)Reaction functions are downward sloping & the less of the action one firm chooses, the less of the action the other firm chooses
• C)Reaction functions are upward sloping & the more of the action one firm chooses, the more of the action the other firm chooses
• D)Reaction functions are upward sloping & the less of the action one firm chooses, the less of the action the other firm chooses
• E)In the Cournot model, quantities are strategic substitutes

---

Definitions:

Equity Method Investments

An accounting technique used to record investments in which the investor has significant influence over the investee but does not control it outright, typically through the ownership of 20% to 50% of the voting stock.

Cash Dividends

A financial distribution in the form of cash from a corporation to its investors as profits.

Dividend Revenue

Income received from owning shares in a company when the company decides to distribute some of its earnings to shareholders.

Unrealized Gain

The paper profit attributed to an investment that has increased in value but has not yet been sold by the investor.