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

question 31

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 negative externality exists in the case of a particular good, and if that is not reflected in the price, _____.

• A)too little of that good is produced and consumed
• B)too much of that good is produced and consumed
• C)all resources are taken away from the production of that good
• D)the government completely prohibits the consumption of that good
• E)all resources are allocated to the production of that good

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Definitions:

Operating Expense

Expenses that a business incurs through its normal business operations, often excluding the cost of goods sold, financing costs, and taxes.

Income Statement

A document presenting a business's income and outgoings within a set timeframe, leading to a declaration of either profit or loss.

Ending Capital

Beginning Capital + Additional Investments + Net Income – Withdrawals = Ending Capital. Or: Beginning Capital + Additional Investments – Net Loss – Withdrawals = Ending Capital.

Worksheet

A document used by accountants to gather information from financial statements, adjust and close entries, and prepare financial statements.