Which of the Following Statements Is True

question 31

Multiple Choice

Which of the following statements is true ?

• A) A vertical merger is a merger of firms that compete in the same market.
• B) The rule of reason doctrine declares that the existence of monopoly alone is illegal.
• C) Government regulation is economically justifiable for a natural monopoly.
• D) Deficient information on unsafe products causes underconsumption.

---

Definitions:

Net Income

The total amount of profit earned by a company after all expenses and taxes have been deducted from total revenue.

Cash Dividends

Profits distributed by a company to its shareholders out of the company's current or retained earnings, typically in the form of cash.

Preferred Stock

A class of ownership in a corporation with a specified dividend that is paid before any dividends are paid to common stock holders and typically with no voting rights.

Common Stock

Type of security that signifies ownership in a corporation and represents a claim on part of the company's profits and assets.