Private Organizations,such as Consumer Reports,are Able to Earn a Profit

question 46

Multiple Choice

Private organizations,such as Consumer Reports,are able to earn a profit by serving as quality certifiers because:

• A) some well-informed buyers are willing to provide good information.
• B) some well-informed sellers want to send signals to buyers.
• C) some poorly informed buyers are willing to pay for better information.
• D) some poorly informed sellers are willing to pay to reduce the quality of buyers' information.

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Definitions:

Return on Investment

A performance measure used to evaluate the efficiency or profitability of an investment, calculated by dividing net profit by the cost of the investment.

Units per Year

A measure of production output or activity volume, indicating the number of units produced or sold within a year.

ROI Computation

The calculation of Return on Investment, which measures the gain or loss generated on an investment relative to the amount of money invested.

Net Book Value

The value of an asset after accounting for depreciation or amortization found on a company's balance sheet.