Table 17-19 Consider a Small Town That Has Two Grocery Stores from Stores

question 409

Multiple Choice

Table 17-19
Consider a small town that has two grocery stores from which residents can choose to buy a loaf of bread. The store owners each must make a decision to set a high bread price or a low bread price. The payoff table, showing profit per week, is provided below. The profit in each cell is shown as (Store 1, Store 2) .
-Refer to Table 17-19. If grocery store 1 sets a low price, what price should grocery store 2 set? And what will grocery store 2's payoff equal?

• A)Low price, $250
• B)High price, $400
• C)Low price, $50
• D)High price, $325

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Definitions:

Intermediate Calculations

Steps or computations performed within a larger mathematical, financial, or statistical process that are necessary for reaching the final result.

Controllable Costs

Expenses that a manager or business can influence or manage directly, such as supplies, marketing expenses, and staff wages.

Responsibility Accounting System

A system of accounting that segments financial data and operational data by areas of responsibility, facilitating monitoring and assessment of individual departments or managers.

Responsibility Center

A segment within an organization with its own budgets and financial targets, where the managers are accountable for its performance.