A Liquidity Ratio Measures the

question 54

Multiple Choice

A liquidity ratio measures the

• A)income or operating success of a company over a period of time.
• B)ability of a company to survive over a long period of time.
• C)short-term ability of a company to pay its maturing obligations and to meet unexpected needs for cash.
• D)percentage of total financing provided by creditors.

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Definitions:

Profit-Maximizing Price

The optimal selling price for a product or service that leads to the highest possible profits for the producer or seller.

Weebles

A line of children's toys designed with a weighted bottom so that they wobble but don't fall down.

Market

A social or economic system where goods and services are exchanged between buyers and sellers using money or barter.

First-Degree (Perfect) Price Discrimination

A pricing strategy where a seller charges the maximum possible price for each unit consumed that the consumer is willing to pay.