The Textile Industry in a Foreign Country Is Controlled by Four

question 75

Multiple Choice

The textile industry in a foreign country is controlled by four major companies. Last week, one of the companies decided to cut prices as a way to expand inventory. Since this industry is an oligopoly, what will be the likely response of the other three companies?

• A) They will increase production levels.
• B) They will make similar price cuts.
• C) They will raise prices.
• D) They will seek additional market share.
• E) They will not respond to the price cuts.

---

Definitions:

Earnings Per Share

A profitability metric that measures the amount of net income earned per share of a company's outstanding stock.

Dividends Per Share

The amount of dividend a company pays out for each share of its stock over a specific period, typically a quarter or year.

Net Income

The total profit or loss a company generates from its operations, calculated as revenues minus expenses, taxes, and additional costs.

Cash Dividend

A payment made by a corporation to its shareholders, the amount of which is determined by the company's board of directors, and is usually distributed in cash based on the profits earned.