Government Agencies May Fail to Identify Anticompetitive Behavior If

question 145

Multiple Choice

Government agencies may fail to identify anticompetitive behavior if

• A)competitors have been forced out of business due to inefficient production and the inability to keep prices low.
• B)dominant firms raise prices to keep rivals competitive.
• C)cartel members decide to disinherit a member firm.
• D)Wall Street supports lower prices.

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Definitions:

Leverage

Utilizing borrowed funds or debt to enhance the possible returns from an investment.

EBIT

Earnings Before Interest and Taxes, a measure of a firm's profit that includes all expenses except interest and income tax expenses.

WACC

Weighted Average Cost of Capital, a calculation used to estimate the average cost of a company's financing including equity and debt, reflecting the risk of investments.

Unlevered Return

The return on an investment that has not been adjusted for the effects of leverage or borrowing.