What Reason Can Be Given for the Importance of Price

question 3

Multiple Choice

What reason can be given for the importance of price stabilization for tourist purchases?

• A) Tourists are always hunting for bargains.
• B) Rising prices automatically tend to reduce the volume of demand.
• C) Tourists probably will not return so we can charge them more just so long as we keep the prices stable.
• D) Tax collections to the government will be more favorable.
• E) Demand will probably rise.

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Definitions:

Market Price

The current trade value at which a service or asset can be exchanged.

Shares Outstanding

The complete count of a corporation's shares currently in possession of all shareholders, including those owned by institutional investors and the restricted shares held by the company's executives and insiders.

Cyclical Dividend Policy

A dividend payment strategy where dividends fluctuate in line with the company's earnings, which often coincide with economic cycles.

Retention Ratio

The percentage of net income that is retained by a company rather than distributed to its shareholders as dividends.