To Help Keep Debt Ratios Within Normal Limits,companies Might Adopt

question 164

Multiple Choice

To help keep debt ratios within normal limits,companies might adopt the following strategies:

• A)decrease revenues.
• B)sell stock.
• C)choose to borrow more money.
• D)increase costs.

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Definitions:

Cartel

An organization of sellers designed to coordinate supply and price decisions so that the joint profits of the members will be maximized. A cartel will seek to create a monopoly in the market for its product.

Monopolist

A single seller in a market who has significant control over the price and supply of a product or service.

AVC

Average Variable Cost; the total variable costs of production divided by the quantity of output produced.

ATC

Average Total Cost, which is calculated by dividing the total cost of production by the quantity of output produced. It encompasses both fixed and variable costs.