Abbott and Costello Are Two Firms That Compete with Each

question 45

Multiple Choice

Abbott and Costello are two firms that compete with each other in the market for ice-cream.They can price their product at a high,medium,or low price.The following matrix shows their profits from their respective pricing strategies.
Table 15-3
-Refer to Table 15-3.When Costello chooses the low-pricing strategy,Abbott's highest possible profit is:

• A)$50
• B)$21
• C)$107
• D)$115

---

Definitions:

External Financing Needed (EFN)

The amount of financing required to balance both sides of the statement of financial position.

Dividend Payout Ratio

A financial ratio that measures the percentage of net income a firm pays out to its shareholders as dividends.

Cash Dividends

Money paid to shareholders by a corporation, typically a share of the company’s profits.

Aggregation

The process of combining multiple units or factors into a single group or total.