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

question 106

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 true of an externality?

• A)An externality enhances the efficiency of the market system.
• B)An externality is not an economic problem because it is external to the market.
• C)An externality is a cost borne by the people who are directly or indirectly involved in the production of a good or service.
• D)An externality accrues to someone who had nothing to do with the production or consumption of a good or service.
• E)An externality refers to some unexpected change in the equilibrium price or quantity of a product.

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Definitions:

Interest Rate

The cost of borrowing money or the return on investment for savings and loans, expressed as a percentage of the principal.

Enduring Popularity

a state whereby something maintains widespread approval, support, or use over a long period.

Interest Rate

The piece of a loan accruing interest charges against the borrower, usually depicted as an annual percentage of the outstanding loan quantity.

Perfect Asset Market

A theoretical financial market where securities are perfectly liquid, information is freely available to all investors, and there are no transaction costs, allowing for the efficient allocation of assets.