Which of the Following Statements Is True About a Soft

question 30

Multiple Choice

Which of the following statements is true about a soft commitment?

• A)It is bad for competitors
• B)It is good for competitors
• C)In Cournot competition,capacity expansion is an example of a soft commitment
• D)In Betrand competition,a commitment to reduce prices is an example of a soft commitment
• E)Tough commitments are always in the best interest of a firm

---

Definitions:

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance premiums.

Variable Costs

Expenses that change in proportion to the activity or production level of a business.

Output

The total amount of goods or services produced by a company or economy in a given period.

Production Function

A technological relationship expressing the maximum quantity of a good attainable from different combinations of factor inputs.