If Two Firms Exist in the Market, It Is Often

question 17

Multiple Choice

If two firms exist in the market, it is often expected that the Cournot (Nash) equilibrium will occur. If the firms have significant excess capacity, then it is likely that corporate strategy will emphasize:

• A) competition and high prices.
• B) competition and low prices.
• C) cooperation and low prices.
• D) cooperation and high prices.

---

Definitions:

Finishing Department

The section of a manufacturing plant where products are completed, undergoing final processes such as painting, polishing, or packaging.

Production Departments

Divisions within a manufacturing company responsible for different stages of the production process, from raw materials to finished products.

Manufacturing Overhead

All indirect costs associated with manufacturing, such as utilities, maintenance, and factory management salaries, not directly tied to production.

Customizing Department

A specialized department within a company focused on modifying and tailoring products to meet specific customer requirements.