Suppose That You Have Noticed That Almost All of the Car

question 18

Multiple Choice

Suppose that you have noticed that almost all of the car dealers in your city are located along a 3-block stretch of the same street.A likely reason for this clustering of car dealers is that:

• A)the dealers are better able to form a cartel.
• B)each dealer is attempting to locate closest to the customers.
• C)there is a social norm in that city that dealers follow in choosing location.
• D)each dealer sells a different brand of car,so they are not competitors and do not have to be concerned about the other dealers' locations.

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Definitions:

Acid-Test Ratio

A financial metric used to determine a company's short-term liquidity position by calculating the ratio of its most liquid assets to its current liabilities.

Stockholders' Equity

The residual interest in the assets of a corporation after deducting liabilities, representing the ownership interest of the shareholders.

Prepaid Expenses

Costs paid in advance for goods or services to be received in the future, treated as assets until used.

Acid-Test Ratio

A financial metric that measures the ability of a company to pay off its current liabilities with its quick assets such as cash, accounts receivable, and short-term investments.