Joe Is the Owner of the 7-11 Mini Mart,Sam Is

question 16

Multiple Choice

Joe is the owner of the 7-11 Mini Mart,Sam is the owner of the SuperAmerica Mini Mart and together they are the only gas stations in town.At the current price of $3 per gallon,both receive total revenues of $1,000.Joe is considering cutting his price to $2.90,which would increase his total revenue to $1,350 if Sam continues to charge $3.If Sam's price remains $3 after Joe cuts his price,Sam will collect $500 in revenues.If Sam cuts his price to $2.90,his total revenues would also rise to $1,350 if Joe continues to charge $3.Joe will collect $500 in revenues if he keeps his price at $3 while Sam lowers his to $2.90.Joe and Sam will receive $900 each in total revenue if they both lower their price to $2.90.You may find it easier to answer the following question if you fill in the payoff matrix below. $\begin{array}{c}\quad\quad\quad\quad\quad\quad\quad\text { Joe }\\\text { Sam }\begin{array}{|l|c|c|}\hline &\begin{array}{c}\text { Cut } \\\text { Price }\end{array} & \begin{array}{c}\text { Keep Old } \\\text { Price }\end{array} \\\hline \text { Cut } \\\text { Price } \\\hline \text { Keep Old } \\\text { Price } \\\hline\end{array}\end{array}$
Refer to the information given above.To Sam,cutting his price to $2.90 is a:

• A) revenue maximizing strategy.
• B) dominant strategy.
• C) dominated strategy.
• D) profit maximizing strategy.

Recognize the role and impact of retained earnings on corporate investment and shareholder value.

Understand the importance of innovation and risk in earning profits within competitive markets.

Grasp the concept of financial intermediaries and their role in the capital allocation process.

Explain how investments in stocks can lead to capital gains or losses and the factors that might influence these outcomes.

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Definitions:

Ventral Body Cavity

The front portion of the body cavity that houses many of the body’s vital organs, including those within the thoracic and abdominal pelvic cavities.

Visceral Peritoneum

The inner layer of the peritoneum that covers the external surfaces of most abdominal organs, providing a slippery surface that allows the organs to move against each other without friction.

Plane of Section

An imaginary flat surface that divides the body or an organ into different sections, used in anatomical descriptions and dissections.