Beranek Corp

question 100

Multiple Choice

Beranek Corp.has $410,000 of assets,and it uses no debt-it is financed only with common equity.The new CFO wants to employ enough debt to bring the debt/assets ratio to 40%,using the proceeds from the borrowing to buy back common stock at its book value.How much must the firm borrow to achieve the target debt ratio?

• A)$155,800
• B)$164,000
• C)$172,200
• D)$180,810

Assess the role of market demand and competition on long-run economic profits and efficiency.

Grasp the consequences of failing to meet consumer preferences in a competitive market.

Understand the concept of price discrimination and its impact on different consumer groups.

Identify the conditions under which firms can gain from price discrimination.

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Definitions:

Collusive Behavior

Actions among firms to limit competition, set prices, or otherwise interfere with free market operations, often illegally or in secret.

Cartel

An association of independent businesses organized to regulate production, pricing, and marketing of goods by the members to monopolize a market.

Economic Efficiency

A state where resources are allocated in a manner that maximizes the production of goods and services without wasting any resources.

Economies of Scale

Financial advantages gained by firms due to their operational size, where a greater volume of production usually correlates with a lower cost for each output unit.