Author Question: Mrs. Wallace and Mrs. Jackson both signed up for 6 months (each incurred a 200 total payment ... (Read 13 times)

sam.t96 · **on:** Jun 29, 2018

Mrs. Wallace and Mrs. Jackson both signed up for 6 months (each incurred a 200 total payment required in advance, and nonrefundable) at the local workout club. Wallace enjoyed all 6 months.

Jackson dropped out after three months due to other unexpected commitments. Which of the following is true? A) Wallace's sunk cost was zero.
B) Jackson's sunk cost was 100.
C) Jackson's sunk cost was 200, and so was Wallace's.
D) Wallace's sunk cost was 100.
E) None of the above.

Question 2

Refer to the scenario above. What is the payoff to Firm B in equilibrium?

A) 2.6 million
B) 0
C) 4 million
D) 3 million