Table 11-9 Alpha and Beta Are the Only Firms Selling

question 24

Multiple Choice

Table 11-9
Alpha and Beta are the only firms selling gyros in the upscale town of Delphi. Each firm must decide on whether to offer a discount to students to compete for customers. If one firm offers a discount but the other does not, then the firm that offers the discount will increase its profit. Table 11-9 shows the payoff matrix for this game.
-Refer to Table 11-9.If Alpha assumes that Beta would offer a student discount,what should it do?

• A) Alpha should not offer a student discount.
• B) Alpha should also offer a student discount.
• C) Alpha should wait at least a year to see if Beta stops offering a student discount before making a decision.
• D) Being a duopolist, Alpha is not affected by Beta's choices because it has a secure 50 percent market share.

Apply CVP analysis to decision-making in both manufacturing and service industries.

Understand the assumptions underlying CVP analysis and their implications.

Apply sensitivity analysis to assess changes in assumptions.

Understand the concept and calculation of operating leverage.

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Characteristic of reflecting light, typically because of a smooth, polished surface that appears bright or glistening.

Dull Slate

A type of metamorphic rock known for its dull appearance and fine-grained texture, typically used in roofing and flooring.

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A linear arrangement of textural or structural features in rock, often indicative of the flow or movement direction during formation.

Long Crystals

Mineralogical structures characterized by their elongated shape, often formed under certain conditions of temperature and pressure.