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evablogger [386]
2 years ago
11

Table 17-29 Suppose that two firms, Wild Willy's Wonderdrink (Firm W) and Hyper Hank's Hydration (Firm H), comprise the market f

or energy drinks. Each firm determines that it could lower its costs and increase its profits if both firms reduced their advertising budgets. But for the plan to work, each firm must agree to refrain from advertising. Each firm believes that advertising works by increasing the demand for the firm's energy drinks, but each firm also believes that if neither firm advertises, the cost savings will outweigh the lost sales. The table below lists each firm's individual profits:
Firm W

Breaks agreement Maintains agreement and advertises and does not advertise

Firm H Breaks agreement and advertises Firm W's profit = $16,500 Firm H's profit = $5,000 Firm W's profit = $14,000 Firm H's profit = $11,000
Maintains agreement and does not advertise Firm W's profit = $24,000 Firm H's profit = $4,000 Firm W's profit = $22,500 Firm H's profit = $10,000
Refer to Table 17-29. Which of the following statement(s) correctly characterizes the outcome of this game?

A. Although both firms collectively would earn higher profits by maintaining the agreement not to advertise, self-interest will cause each firm to break the agreement.
B. There is a Nash equilibrium when both firms advertise.
C. Both Firm W and Firm H have a dominant strategy to advertise.
D. All of the above are correct.
Business
1 answer:
Andrei [34K]2 years ago
5 0

Both Firm W and Firm H have a dominant strategy to advertise.

Explanation:

Dominant strategies, never despite what other competitors do, are treated similarly than others. In game theory, two forms of strategic supremacy exist:

-a strategy that is purely dominant is a strategy which provides the player with often better advantage, regardless of what the another player's strategy is ;

- a strategy that is weakly dominant, which gives all these other player's strategies the very same value, and which makes certain strategies more stringent.

Especially if one game is only weakly dominant (this means that it also does at least the same thing as any other strategy, but it just can in certain situations match other strategies, not beat them), and the same wages would apply to the player may be applied to more than one dominant strategy per player.

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Newhard Company assigns overhead cost to jobs on the basis of 115% of direct labor cost. The job cost sheet for Job 313 includes
Nina [5.8K]

Answer:a.Total manufacturing costs for Job 313 =$52,500

Unit Product Cost for Job 313=$30

Explanation:

Total manufacturing costs=Direct materials+Direct labor costs+Overhead costs

But Overhead cost =115% of direct labor cost

= 115% x $10,600

=$12,190

Total manufacturing costs =$29,710 + $10,600+$12,190

=$52,500

Unit Product Cost=Total Manufacturing costs/ Total Number of Units Produced =$52,500 /1,750 units

=$30

8 0
2 years ago
During its most recent fiscal year, Dover, Inc. had total sales of $3,200,000. Contribution margin amounted to $1,500,000 and pr
ANEK [815]

Answer:

Fixed costs= 1,100,000

Explanation:

Giving the following information:

During its most recent fiscal year, Dover, Inc. had total sales of $3,200,000. Contribution margin amounted to $1,500,000 and pretax income was $400,000.

We need to reverse engineer the income statement to determine the total fixed costs. We know that the pretax income is the difference between the total contribution margin and the fixed costs.

Pretax= total contribution margin - fixed costs

400,000= 1,500,000 - FC

Fixed costs= 1,500,000 - 400,000

Fixed costs= 1,100,000

5 0
3 years ago
Petro Roos is thinking of purchasing the business premises rather than renting it. Provide Two separate advantages and two separ
lilavasa [31]

Answer:

Advantages of buying business premises

There are considerable advantages to securing a mortgage to buy business premises, including:

  1. your mortgage repayment is likely to be similar to or less than a rental payment on the same property
  2. with a fixed rate mortgage, your monthly repayments will be predictable
  3. you aren't exposed to any sudden, large rent increases
  4. you may be able to sublet any free space, reducing your monthly repayments (you may require permission from your lender to do so) and allowing you to generate extra income
  5. interest payments on a commercial mortgage are tax-deductible
  6. any gain in value of the property will increase your capital
  7. as your business grows, you may be able to extend your existing premises, avoiding relocation costs
  8. you have control over what alterations you want to make to your office space

Disadvantages of buying business premises

The disadvantages of buying business premises include the following:

  1. Unlike renting, you'll need to come up with a substantial mortgage deposit - this is money that might be used for more important business purposes.
  2. If you own premises, you may find it harder to relocate your business, because selling business premises is a complex and sometimes lengthy process. If you rent, you may be able to negotiate to end your rental agreement, or to find another organisation to take over your tenancy at short-notice.
  3. If you have a variable rate mortgage, you are exposed to increases in interest rates.
  4. Owning a property means you'll be responsible for factors such as maintenance, fixtures and fittings, insurance, decoration and security, which can prove expensive.
  5. Repaying a commercial mortgage
  6. Commercial mortgage fees and costs
  7. Book traversal links for Advantages and disadvantages of buying business premises

Explanation:

4 0
2 years ago
German companies do not recognize the profit until the project is completely finished and they have been paid. recognize profits
photoshop1234 [79]

Answer:

German companies do not recognize the profit <u>until the project is completely finished and they have been paid.</u>

Explanation:

German companies prepare their accounting balances under IFRS standards (common for all EU member countries) and German GAAP.

Under IFRS standards, revenue must be recognized when the business satisfies a performance obligation.

German GAAP is very prudent in determining profits, that is why they are only recognized once a project is completely finished and it has been completely paid.

Some specific German rules are to starting to change due to globalization, but others are still subject to legal requirements.

7 0
3 years ago
One type of mutual fund does not endeavor to achieve the goals of a balance of bonds and stock or​ growth, income, and stability
jonny [76]

The correct answer is the Life Cycle Fund.

The Life Cycle Fund is a mutual fund that is automatically adjusted during the life of the fund. The fund managers work to balance the investments in the fund to match an investor's age and risk tolerance as the investor gets closer to retirement.

3 0
2 years ago
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