Suppose That a Company Feels That the Price of Its

question 167

Multiple Choice

Suppose that a company feels that the price of its stock is more than the average small investor can afford.To lower the price the company could engage in a

• A)stock split.
• B)stock repurchase.
• C)proxy vote.
• D)All of the above are correct.

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Definitions:

Ed

A common abbreviation for price elasticity of demand, which measures how much the quantity demanded of a good responds to a change in its price.

Total Revenues

The total amount of money generated by a business from the sale of goods and services before any costs or expenses are deducted.

Unit Elasticity

Unit elasticity refers to a situation where a change in the price of a good or service results in a proportionally equal change in the quantity demanded or supplied, indicating a unitary elasticity of demand or supply.

Maximum Total Revenue

The highest possible earnings that a firm can achieve from the sale of goods or services, typically found by optimizing price and quantity sold.