Horizontal Price-Fixing

question 36

Multiple Choice

Horizontal price-fixing:

• A) is also called resale price maintenance.
• B) occurs when the manufacturer gets the retailer to agree to follow the suggested retail price.
• C) can be legally justified if there was a direct agreement between competitors.
• D) is an attempt by competitors to interfere with the market and control prices.

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Definitions:

Acid-test Ratio

Acid-test ratio is a financial metric that measures a company's ability to pay off its short-term liabilities with its quick assets (cash, marketable securities, and current receivables) without selling any inventory.

Debt-to-equity Ratio

A ratio illustrating the proportional use of shareholder equity and debt in the acquisition of a company's assets.

Receivable Turnover

A financial metric indicating the efficiency of a company in collecting its accounts receivable or the effectiveness of its credit policy.

Inventory Turnover

A metric representing the frequency at which a business's stock is sold and restocked within a given timeframe, reflecting how effectively inventory is handled.