Exhibit 10.9 -Refer to Exhibit 10.9.Suppose Firm a and Firm B Are

question 165

Multiple Choice

Exhibit 10.9

-Refer to Exhibit 10.9.Suppose Firm A and Firm B are a duopoly in this market and the matrix shows the profit expected for different strategies.If both charge the low price and split the market,then each firm earns _____ profit a day.

• A)$20
• B)$30
• C)$50
• D)$70
• E)$100

Grasp the basics and assumptions of the EOQ model for inventory management.

Recognize the role and impact of accounts receivable management on a firm's cash flows and profitability.

Understand the objectives of holding marketable securities and their role in liquidity management.

Acknowledge the influence of credit sales terms, including discounts and collection periods, on firm's credit management efficiency.

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Definitions:

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance.

Variable Cost

A cost that changes in proportion to the level of production or business activity.

Contribution Margin Ratio

The percentage of each sale that contributes to covering fixed costs after variable costs have been paid.

Fixed Costs

Costs that do not vary with production level, such as rent, insurance, and salaries of administrative staff.