Table 17-20

question 140

Multiple Choice

Table 17-20.Brian and Matt own the only two bicycle repair shops in town.Each must choose between a low price for repair work and a high price.The annual economic profit from each strategy is indicated in the table.The profits are shown as (Matt,Brian) in each cell.

-Refer to Table 17-20.Which of the following statements is correct?

• A) Matt's dominant strategy is to charge a low price.
• B) Brian's dominant strategy is to charge a high price.
• C) The dominant strategy for both Brian and Matt is to charge a low price.
• D) Matt's dominant strategy is to charge a high price.

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Definitions:

Profit Mark-Up

The percentage added to the cost of goods to arrive at the selling price.

Target Selling Prices

The intended price at which a company aims to sell its products, often determined by market conditions and cost considerations.

Target Cost

The desired cost of a product derived from its expected selling price and desired profit.

Life Cycle

The series of stages that a product, project, or service goes through from initial conception to its eventual discontinuation.