If a Firm Can Sell Essentially the Same Product with the Same

question 21

Multiple Choice

If a firm can sell essentially the same product with the same quality under different brand names that have different perceived quality, the firm

• A)has a moral hazard problem.
• B)benefits from asymmetric information.
• C)creates an arbitrage opportunity.
• D)is engaging in unfair trading practices.

---

Definitions:

Current Obligations

Short-term financial liabilities or debts that are due for payment within one year.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed in the business cycle within one year.

Current Liabilities

Short-term financial obligations due within one year or less, typically including accounts payable, short-term loans, and other similar liabilities.

Obligations

The responsibilities or liabilities a company has, typically financial in nature, that it is required to pay to others.