Effective Signals

question 102

Multiple Choice

Effective signals

• A)convey useful information from informed parties to uninformed parties.
• B)impose little or no cost on the signaler.
• C)cannot be conveyed accurately when there is an information asymmetry.
• D)raise the quantity sold but reduce the price sellers receive.

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Definitions:

Sales Units

The number of units of a product that have been sold during a specific period.

Product Warranty Expense

Costs associated with repairing or replacing products under warranty, recognized by a company as an expense.

Matching Concept

An accounting principle that dictates expenses must be matched with the revenues they help to generate within the same period, to accurately calculate profits.

Estimating

The process of approximating the time, cost, and resources needed to complete a project.