The Table Below Shows the Payoff (Profit) Matrix of Firm

question 78

Multiple Choice

The table below shows the payoff (profit) matrix of Firm A and Firm B indicating the profit outcome that corresponds to each firm's pricing strategy (where $500 and $200 are the pricing strategies of two firms) .Table 12.2

-When a private transaction imposes costs on others not directly involved in the transaction, _____.

• A)a negative externality exists
• B)a positive externality exists
• C)the good involved in the transaction is a club good
• D)the tragedy of commons problem arises
• E)a free rider problem arises

---

Definitions:

Income Statement

A financial document that shows a company's revenues, expenses, and net income over a specific period of time.

Fiscal Period

A specified period of time used for financial reporting and budgeting, typically a year, quarter, or month.

Biweekly Salaries

Payments made to employees every two weeks, totaling 26 payments throughout the year.

Unearned Revenue

Money received by a company for a product or service that has yet to be delivered or performed.