An Association of Producers That Fixes Common Prices and Output

question 19

Multiple Choice

An association of producers that fixes common prices and output quotas is known as a

• A) cartel.
• B) common selling organization.
• C) joint-marketing arrangement.
• D) trade association.

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Definitions:

EBIT

Earnings Before Interest and Taxes; a measure of a firm's profitability that includes all expenses except interest and income tax expenses.

Unlevered Firm

A company that operates without any debt financing, relying solely on equity for its financing needs.

Levered

Pertaining to the use of borrowed capital or debt to increase the potential return of an investment.

Break-Even EBIT

The level of Earnings Before Interest and Taxes that a company needs to achieve in order to cover all of its operating expenses without making a profit or loss.