Table 17-3 Two cigarette manufacturers (Firm A and Firm B) are faced with lawsui
ID: 2441280 • Letter: T
Question
Table 17-3
Two cigarette manufacturers (Firm A and Firm B) are faced with lawsuits from provinces to recover the health-care related expenses associated with cigarette smoking. Both cigarette firms have evidence that indicates that cigarette smoke causes lung cancer (and other related illnesses). Provincial prosecutors do not have access to the same data used by cigarette manufacturers and thus will have difficulty recovering full costs without the help of at least one cigarette firm study. Each firm has been presented with an opportunity to lower their liability in the suit if they cooperate with attorneys representing the provinces.
Firm A
Concede that
cigarette smoke
causes lung cancer
Argue that there is no evidence that smoke causes cancer
Firm B
Concede that
cigarette smoke
causes lung cancer
Firm A loss = –$20
Firm B loss = –$15
Firm A loss = –$50
Firm B loss = –$5
Argue that there
is no evidence that
smoke causes cancer
Firm A loss = –$5
Firm B loss = –$50
Firm A loss = –$10
Firm B loss = –$10
____ 17. Refer to Table 17-3. Pursuing its own best interests, when will Firm B concede that cigarette smoke causes lung cancer?
a.
only if Firm A concedes that cigarette smoke causes lung cancer
b.
only if Firm A does not concede that cigarette smoke causes lung cancer
c.
regardless of whether Firm A concedes that cigarette smoke causes lung cancer
d.
under no circumstances
Firm A
Concede that
cigarette smoke
causes lung cancer
Argue that there is no evidence that smoke causes cancer
Firm B
Concede that
cigarette smoke
causes lung cancer
Firm A loss = –$20
Firm B loss = –$15
Firm A loss = –$50
Firm B loss = –$5
Argue that there
is no evidence that
smoke causes cancer
Firm A loss = –$5
Firm B loss = –$50
Firm A loss = –$10
Firm B loss = –$10
Explanation / Answer
Answer :
C. regardless of whether Firm B concedes that cigarette smoke causes lung cancer
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