The Small-Firm Effect Refers to the

question 21

Multiple Choice

The small-firm effect refers to the

• A)negative returns earned by small firms.
• B)returns equal to large firms earned by small firms.
• C)abnormally high returns earned by small firms.
• D)low returns after adjusting for risk earned by small firms.

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Definitions:

Marginal Revenue

The additional income that is generated by selling one more unit of a good or service.

Peak-Load Pricing

A pricing strategy that applies higher charges for goods or services during times of peak demand to manage usage and maximize profit.

Second-Degree Price Discrimination

Practice of charging different prices per unit for different quantities of the same good or service.

Two-Part Tariff

A pricing method that involves a fixed fee plus a variable charge based on the quantity of goods or services consumed.