Consider Two Restaurants Located Next Door to Each Other: Quick

question 86

Multiple Choice

Consider two restaurants located next door to each other: Quick Burger and The Sunshine Café. If Quick Burger opens a drive-through window, the increased traffic and noise will bother customers seated outside at The Sunshine Café. The table below shows the monthly payoffs to Quick Burger and The Sunshine Café when Quick Burger does and does not operate a drive-through window. $$\begin{array} { | l | c | c | } \hline & \begin{array} { c } \text { Quick Burger } \\\text { Operates a } \\\text { Drive-Through } \\\text { Window }\end{array} & \begin{array} { c } \text { Quick Burger } \\\text { Does Not Operate } \\\text { Drive-Through } \\\text { Window }\end{array} \\\hline \text { Quick Burger } & \$ 24,000 & \$ 15,000 \\\hline \text { The Sunshine Café } & \$ 11,000 & \$ 23,000 \\\hline\end{array}$$ If Quick Burger has the legal right to operate a drive-through window, then the Sunshine Café would be willing to pay Quick Burger as much as ______ per month to NOT operate a drive-through window.

• A)$9,000
• B)$11,000
• C)$12,000
• D)$15,000

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Definitions:

Cash Account

An account that records all transactions involving cash, including receipts and payments, reflecting the company's cash flow.

Unearned Management Fees

Income received by a company for services yet to be performed and is recorded as a liability until those services are delivered.