Which of the Following Statements Is CORRECT

question 30

Multiple Choice

Which of the following statements is CORRECT?

• A) If a firm is found guilty of cannibalization in a court of law,then it is judged to have taken unfair advantage of its competitors.Thus,cannibalization is dealt with by society through the antitrust laws.
• B) If a firm is found guilty of cannibalization in a court of law,then it is judged to have taken unfair advantage of its customers.Thus,cannibalization is dealt with by society through the antitrust laws.
• C) If cannibalization exists,then the cash flows associated with the project must be increased to offset these effects.Otherwise,the calculated NPV will be biased downward.
• D) If cannibalization is determined to exist,then this means that the calculated NPV if cannibalization is considered will be higher than the NPV if this effect is not recognized.
• E) Cannibalization,as described in the text,is a type of externality that is not against the law,and any harm it causes is done to the firm itself.

---

Definitions:

Slavery

A system in which individuals are owned by others, deprived of personal freedom, and compelled to work without remuneration.

Dred Scott Decision

An 1857 U.S. Supreme Court ruling that African Americans, whether enslaved or free, could not be American citizens and therefore had no standing to sue in federal court.

Moderate Republicans

Members of the Republican Party in the United States who hold centrist views, advocating for policies that are not too conservative or liberal.