Consider a Four-Tier Pyramid and a Single Operating Company

question 39

Multiple Choice

Consider a four-tier pyramid and a single operating company.Assume that 51 percent of the votes confer control at each tier.What is the minimum percentage ownership (approximately) at the highest level in the pyramid that will enable control of the operating company?

• A)13 percent
• B)26 percent
• C)50 percent
• D)51 percent

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Definitions:

Price Level

A general measure of current prices for every type of good or service created in the economy.

Real Wage

The purchasing power of an individual's earnings, adjusted for inflation, reflecting the actual goods and services that wages can buy.

Monopsonist

A market condition where there is only one buyer for a product or service, giving that buyer significant control over the market.

MRP

Stands for Material Requirements Planning, a system used for production planning, scheduling, and inventory control.