Under a Tying Contract

question 29

Multiple Choice

Under a tying contract,

• A)the price a buyer must pay for a good is tied to the size of his purchase.
• B)a customer agrees as a condition of buying a good to purchase one or more additional goods from the same seller.
• C)a firm agrees to allow members of its competitors' boards of directors to sit on its board.
• D)a firm agrees to pay an intermediary for having arranged a business deal for the firm.

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Definitions:

Equivalent Interest Rate

A rate that provides the same accumulated interest as would be obtained from several other interest rates over a given time period.

Nearest 0.01%

Adjusting a value so that it is close to an exact hundredth of a percent, enhancing precision.

Nearest 0.01%

An accuracy level in calculations where the result is rounded to the closest one-hundredth of a percent.

Equivalent Interest Rate

A rate that equates two or more interest arrangements by taking into account compounding periods and other terms.