Why Is It Difficult to Determine the Market Price of a Private

question 44

Multiple Choice

Why is it difficult to determine the market price of a private corporation's shares at any point in time?

• A) It is difficult to obtain enough information to accurately value such a company.
• B) The price of its shares is fixed by the owners.
• C) It has a limited number of owners.
• D) There is no organized market for its shares.

---

Definitions:

Marginal Revenue

The increase in total revenue resulting from the sale of one additional unit of a product or service.

Value of the Marginal Product

The additional revenue a firm generates from employing one more unit of input, keeping other inputs constant.

Marginal Productivity

The additional output generated by adding one more unit of a specific input, while holding all other inputs constant.

Marginal Cost

The cost added by producing one additional unit of a product or service, a crucial concept in economics for understanding optimization.