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

question 69

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

-The social cost of a transaction is _____.

• A)the sum of fixed and variable costs
• B)the difference between the total cost and opportunity cost
• C)the sum of private and external costs
• D)the difference between the private and external costs
• E)the sum of fixed costs and opportunity costs

---

Definitions:

NSF Check

A check that has not been honored by the bank due to insufficient funds in the account to cover the amount.

Outstanding Checks

Checks that have been written and recorded in a company’s ledger but have not yet been cleared or deducted from the bank account balance.

Credit Memo

A document issued by a seller to a buyer, reducing the amount owed by the buyer under certain circumstances, such as returned goods or an overcharge.

Debit Memo

A document issued by a seller of goods or services to a buyer, reducing the amount the buyer owes under the original invoice.