Use the Figure to Answer the Following Question(s)

question 144

Multiple Choice

Use the figure to answer the following question(s) .
Figure 11-13

If the firms in the industry depicted in Figure 11-13 can effectively operate as a cartel, what would the industry's price and output be?

• A) price, $10; output, 600
• B) price, $20; output, 400
• C) price, $25; output, 300
• D) price, $30; output, 200

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Definitions:

EPS

Earnings per share. A firm’s earnings stated on a per-share outstanding basis. An important measure of business performance in the stock market.

Equity

Ownership interest in a company, represented by shares that entitle holders to a share of the company's profits.

Financial Leverage

The use of borrowed money to multiply financial performance in terms of ROE and EPS.

Shareholders

Individuals or entities that own shares in a corporation, giving them partial ownership and possibly a right to vote at shareholders' meetings.