Refer to the diagram, which relates to Firm A. Which of the following would shift A's average total cost curve from ATC 1 to ATC 2 ?
A. An increase in the price of a key component used by A in producing its product.
B. A decrease in the incomes of A's customers.
C. A move along A's total product curve (not shown).
D. An improved production method that shifts A's total product curve upward.
D. An improved production method that shifts A's total product curve upward.
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The above figure shows the payoff matrix for two firms, A and B, selecting an advertising budget. The firms must choose between a high advertising budget and a low advertising budget. A Nash equilibrium is that
A) firm A selects a high advertising budget and firm B selects a low advertising budget. B) firm A selects a low advertising budget and firm B selects a high advertising budget. C) both firms select a high advertising budget. D) both firms select a low advertising budget.