Use the Information Below to Answer the Following Questions

question 7

Multiple Choice

Use the information below to answer the following questions.
Fact 15.2.1
Two firms, FastNet and SmartCast are the only Internet providers in a city. They have identical costs and one firm's service is a perfect substitute for the other firm's service. The industry is a natural duopoly. FastNet and SmartCast decide to collude and agree to share the market equally.
-Refer to Fact 15.2.1. What is the Nash equilibrium?

• A)Both firms cheat on the agreement.
• B)One firm cheats and one firm complies.
• C)Both firms comply with the agreement.
• D)New firms enter the market.
• E)Both firms charge the price that would exist in a perfectly competitive market.

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Definitions:

Voucher System

A method of accounting in which a record is kept for each transaction, detailing the necessary approvals and documentation.

Source Documents

Original records that provide evidence of financial transactions, such as receipts, invoices, or bank statements.

Invoice

A document detailing a transaction between a buyer and seller, including the quantities, prices, terms, and conditions of sale.