Other Things Held Constant,which of the Following Actions Would Increase

question 109

Multiple Choice

Other things held constant,which of the following actions would increase the amount of cash on a company's balance sheet?

• A) The company repurchases common stock.
• B) The company pays a dividend.
• C) The company issues new common stock.
• D) The company gives customers more time to pay their bills.
• E) The company purchases a new piece of equipment.

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Definitions:

Marginal Cost

The cost added by producing one additional unit of a product or service, an important concept in economics for determining the optimal level of production.

Monopolist

A single firm or entity that is the exclusive provider of a good or service, thus controlling its market price.

Lerner Indices

Measures of a firm’s market power based on the difference between price and marginal cost, normalized by the product's price.

Marginal Cost

The increase or decrease in the total cost incurred by producing one more unit of a good or service.