Assume That Allied Has Required Cicada to Not Handle Any

question 4

Multiple Choice

Assume that Allied has required Cicada to not handle any of Allied's competitors' products. Which of the following most strongly suggests that this arrangement is legal?

• A) The pricing demands of Cicada have forced many building suppliers out of business.
• B) Companies similar to Allied have demonstrated strong financial performance in recent years.
• C) Cicada often sells groups of homes to institutions that then resell them to individual consumers.
• D) In the past, Cicada and Allied were part of the same company.
• E) Monopolistic competition is encouraged by the government in some cases.

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Definitions:

Reportable Segment

A distinct business segment of a company that can generate its own revenues and expenses and whose operating results are regularly reviewed by the company's management.

Operating Segment

A component of an enterprise that engages in business activities from which it may earn revenues and incur expenses, including segments with intersegment revenues.

Revenue Test

A criterion used to determine the significance of a segment or component of a business by comparing its revenue to a set percentage of the total revenue of the entire entity.

Total Revenues

The aggregate amount of income generated from normal business operations, including sales of goods and services, before any expenses are deducted.