Business Risk Is Related with the Operations of the Firm

question 30

Multiple Choice

Business risk is related with the operations of the firm.Which of the following is not directly associated with, that is, not a part of, business risk?

• A)product demand variability
• B)sales price variability
• C)relative amount of fixed operating costs
• D)degree of price flexibility with respect to changes in operating costs
• E)changes in required returns due to financing decisions

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Definitions:

Tacit Collusion

An unspoken, informal agreement among competitors to avoid competitive behaviors like price wars, leading to higher prices for consumers.

Oligopolies

Market structures in which a few large firms dominate the industry, having significant market power to influence prices and terms of sale.

Market Power

The ability of a firm to influence or control the price and output level in the market.

Interdependence

The mutual reliance between two or more groups or sectors, especially in an economic context, where the actions of one directly affects the others.