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The Disco Shop Sells Stereos in All Price Ranges from Inexpensive

question 32

Essay

The Disco Shop sells stereos in all price ranges from inexpensive to very expensive.The sales people work on commission.They earn a 20 percent commission on the expensive items and only 2 percent on the cheaper items,leading the sales people to prefer selling the more expensive items.Disco makes more profit on the more expensive items.Is this an unlawful bait and switch?


Definitions:

Shares

Units of ownership interest in a corporation or financial asset, providing a proportion of the profits to shareholders.

Firm Commitment Underwriting

A method of underwriting where the underwriter commits to buying all the securities from the issuer and selling them to investors, assuming full financial responsibility for any unsold securities.

Underwriting Spread

The difference between the price at which investment bankers buy an issuance from the issuer and the price at which they sell it to the public.

Shares

Shares are portions of equity within a corporation or financial asset, offering a right to proportional dividends when profits are declared.

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