Blue Company makes three models of tasers. Information on the three products is given below. Tingler Shocker Stunner Sales $296,700 $497,700 $203,500 Variable expenses 147,600 201,100 144,900 Contribution margin 149,100 296,600 58,600 Fixed expenses 120,324 231,218 96,758 Net income $28,776 $65,382 $(38,158) Fixed expenses consist of $304,800 of common costs allocated to the three products based on relative sales, and additional fixed expenses of $29,700 (Tingler), $79,200 (Shocker), and $34,600 (Stunner). The common costs will be incurred regardless of how many models are produced. The other fixed expenses would be eliminated if a model is phased out. James Watt, an executive with the company, feels the Stunner line should be discontinued to increase the company’s net income.

(a) Compute current net income for Cawley Company.

(b) Compute net income by product line and in total for Cawley Company, if the company discontinues the Stunner product line.

(Hint: Allocate the $304,800 common costs to the two remaining product lines based on their relative sales.)

(Round answers to the nearest whole dollar)

Why is the cournot equilibrium an​ equilibrium? a. there are​ short-run barriers to exit in a cournot​ duopoly, so both firms cannot alter their output levels. b. given the other​ firm's level of​ production, both firms are maximizing profits and cannot improve their situation by unilaterally altering their level of output. c. both firms operate at zero profit under a cournot​ equilibrium, so they would face negative profits if they change output. d. both firms operate at minimum​ long-run average cost under a cournot​ equilibrium, so changes to output would reduce​ long-run profits. even if they​ can't collude, why​ don't firms set their outputs at the joint​ profit-maximizing levels​ (i.e., the levels they would have chosen had they​ colluded)? a. given that other firm produces at the collusive​ level, a firm could increase their own profits by increasing output above the collusive level. b. the midpoint of the collusion curve​ (i.e., the collusive​ outcome) lies below the reaction​ curves, so both firms have an incentive to increase output under the cournot duopoly. c. both a and b are correct d. both a and b are incorrect