Share Price Maximization Is Good for Society Because Consumers Benefit

question 28

Multiple Choice

Share price maximization is good for society because consumers benefit.Which of the following best describes this idea?

• A)Firms that maximize share price minimize costs and produce low-quality goods, which only benefits producers.
• B)Firms that maximize share price minimize costs and produce high quality goods that consumers demand.
• C)Firms that maximize share price maximize costs and produce low-quality goods, which benefits society.
• D)Most Canadian households do not own or participate, directly or indirectly, in the stock market and as such they do not benefit from the production of quality goods produced at low cost.

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Definitions:

Excise Taxes

Taxes levied on the sale of specific goods and services, often included in the price of products like gasoline, alcohol, and tobacco.

Cigarettes

Small cylinders of finely cut tobacco leaves rolled in thin paper for smoking.

Tobacco Farming

The agricultural process of growing and harvesting tobacco leaves, which are then processed for use in products like cigarettes.

Perfectly Inelastic

A situation where the quantity demanded or supplied does not change in response to a change in price.