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malfutka [58]
3 years ago
8

Two oligopolists have to decide on their pricing strategy. Each can choose either a high or a low price. If they both choose a h

igh​ price, each will make​ $12 million, but if they both choose a low​ price, each will make only​ $8 million. If one sets a high price and the other a low​ one, the​ low-priced firm will make​ $16 million, but the​ high-priced firm will make only​ $4 million.
In the absence of​ collusion, each will _________.
Business
1 answer:
yulyashka [42]3 years ago
5 0

Answer:

<h2>Considering absence of collusion,the firms will choose low price in this instance.</h2>

Explanation:

  • First,focusing on all the possible payoffs for the firms under low price situation, the possible individual payoffs for the firms are $8 million and $16 million considering that the other firm chooses low price and high price respectively.
  • Now, regarding the individual payoffs from choosing high price, the possible payoffs for the firms are $12 million and $4 million, considering that the other firm chooses high price and low price respectively.
  • Therefore, notice that considering all possible scenarios,both the minimum and maximum payoffs from choosing low price are actually higher than the same estimates under choosing higher price.
  • Hence, to ensure a higher subsequent individual payoff, both the firms would expectedly choose lower price considering the possibilities of both higher minimum and maximum payoff compared to choosing higher price.
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Rane Company had the following assets on January 1, 2017.
Viefleur [7K]

Answer:

Journal entries are prepared below

Explanation:

Journal entries required are given as follows

Jan. 1 (To record retirement of machinery)  

                                                                     Debit        Credit

Accumulated depreciation-equipment     $69,580

Equipment                                                                   $69,580

June. 30 (To record the depreciation expense on forklift)

                                                                     Debit        Credit

Depreciation expense                                2940

Accumulated depreciation-equipment                       2940

Working

Annual depreciation = $29,400 / 5 years = $5880

depreciation for 6 months = $5880 x 6/12 = $2940

June. 30 (To record sale of forklift)

                                                                        Debit        Credit

Cash                                                                 11760  

Accumulated depreciation-equipment(w)    20580  

Equipment                                                                      29400

Gain on disposal of plant assets                                     2940

Working

Accumulated depreciation = 5880 x 3.5 years

 

Dec. 31 (To record depreciation expense on truck)

                                                                     Debit        Credit

Depreciation expense                                 3724

Accumulated depreciation-equipment                       3724

Working

Annual depreciation on truck = ($32,736- $2,944) / 8 years = $3724

Depreciation for 2017 = $3724

 

Dec. 31 (To record discarding of the truck)  

                                                                     Debit        Credit

Salvaged materials                                    2,944

Accumulated depreciation-equipment    22344

Loss on disposal of plant assets               7448

Equipment                                                                    32,736

Working

Accumulated depreciation = 3724 x 6 years = 22,344

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2 years ago
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Answer:

a.a debit to Cash Dividends for $120,000.

Explanation:

The amount of dividend paid is dependent on two function; the number of shares and the amount declared for payment per share.

When it is paid, a credit is posted to cash account and the corresponding debit is posted to the dividend paid account.

As such, since the company has  80,000 shares and the declared dividend  was $1.50,

Total dividend paid = $1.50 × 80000

= $120,000.

Hence cash dividend is debited with $120,000 on payment.

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