Firm a Offers the Same Pension to All Workers,regardless of How

question 37

Multiple Choice

Firm A offers the same pension to all workers,regardless of how many hours they work.Workers value the pension at $10,000 a year (and it costs Firm A $10,000 to provide the benefit) .Firm B does not offer a pension but is like Firm A in all other job characteristics.The labor market is competitive and all workers have comparable skills.If there are workers in both jobs,then

• A) workers that prefer working shorter hours are more likely to work for Firm B.
• B) all workers will prefer working for Firm A.
• C) all workers will be indifferent between working for Firm A and Firm B.
• D) workers that prefer working long hours are more likely to work for Firm B.

Evaluate how buyer power influences a company's ability to capture value.

Understand how product elasticity affects company strategy and consumer demand.

Identify strategies that firms can use to reduce competition and enhance market position.

Assess the implications of cost-reduction strategies on long-term profitability.

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Definitions:

Net Present Value (NPV)

Net Present Value is the difference between the present value of cash inflows and outflows over a period of time, used in capital budgeting to assess the profitability of an investment.

Present Value

The worth at present of future monetary sums or cash flow streams, evaluated with a preset rate of return.

Cash Flows

The sum of funds flowing in and out of a company, particularly as it influences liquidity.

Capital Budgeting Project

A process of evaluating and selecting long-term investments that are expected to generate revenues or reduce costs, aiding in a firm's strategic planning.