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

question 44

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

-Which of the following is an example of a positive externality?

• A)Smoking a cigarette
• B)Driving a less fuel efficient vehicle
• C)Setting up a chemicals factory in a residential area
• D)Overuse of chemical fertilizers
• E)Beekeepers keeping bees for honey

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Definitions:

Average-Total-Cost Curve

A graphical representation showing how the average total cost of producing a good changes as the quantity produced changes.

Average-Fixed-Cost

The fixed costs of production divided by the quantity of output produced; it decreases as production increases.

Average-Variable-Cost

The total variable cost divided by the quantity of output produced.

Marginal Costs

The investment required to manufacture an incremental unit of a product or service.