The Economic Entity Most Likely to Engage in Price Gouging

question 156

Multiple Choice

The economic entity most likely to engage in price gouging is

• A) the manufacturer of the product,such as a Honda generator.
• B) a national big-box store,such as Target or Walmart.
• C) a local,regular supplier of the product.
• D) an individual or business who has a supply of the product somewhere else.
• E) a local resident who wants to get rid of his or her own product.

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Definitions:

Production Quantity

The total volume or number of units of a product made by a company or industry.

Contribution Margin

Contribution margin is a cost accounting concept that calculates the difference between a product's price and its variable costs, indicating how much each unit sold contributes to covering fixed costs and generating profit.

Variable Cost

Costs that fluctuate in relation to the level of output or production, such as raw materials and direct labor expenses.

Operating Cash Flow

Describes the cash generated by the regular operating activities of a business in a specific period.