Larger Companies Often End Up Charging Higher Prices and Achieve

question 25

Multiple Choice

Larger companies often end up charging higher prices and achieve a more dominant position in the market than smaller firms that cannot compete against them and their large advertising budgets.When this occurs,advertising:

• A)highly beneficial to consumers.
• B)highly beneficial to the industry.
• C)should be restricted or banned by governments.
• D)becomes a substitute for competition based on price.
• E)tends to increase the demand for customer service.

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Definitions:

Equity Method

An accounting technique used to record investments in other companies, recognizing income and changes in investment value in proportion to the ownership percentage.

Appraised Value

An estimation of the value of property, typically real estate, as determined by a professional appraiser based on market conditions and property characteristics.

Equity Income

Income that comes from stock dividends or the sale of shares, reflecting earnings from investment in equity securities.