Firm a Has a Strictly Higher Marginal Cost Than Firm

question 70

Multiple Choice

Firm A has a strictly higher marginal cost than firm B. They compete in a homogeneous product Bertrand duopoly. Which of the following results will NOT occur?

• A) Q_A < Q_B
• B) Profit_A = 0 < Profit_B
• C) Revenue of firm A < Revenue of firm B
• D) Price_A < Price_B

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Definitions:

Overhead Controllable Variance

Overhead Controllable Variance refers to the difference between the actual indirect operational expenses incurred and the budgeted or expected overhead costs that could be influenced by management decisions.

Total Overhead Variance

The difference between the actual overhead incurred and the standard overhead assigned to production.

Overhead Variances

The difference between actual overhead costs and the standard (or expected) overhead costs for a period.

Standard Costing System

An accounting system that uses standard costs instead of actual costs for recording costs of inventory and cost of goods sold, tracking variances.