Four propane delivery firms have a tacit agreement to charge a service fee of $50 in addition to $5 per gallon of propane. If the firms' cost of propane increases and one of the four firms advertises that it will increase the cost of a gallon of propane to $5.50 next month, this is an example of ________.
A) a preannouncement
B) a precommitment
C) price leadership
D) a meet-the-competition clause
A) a preannouncement
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The GAP ratio is a measure of __________ risk
A) credit B) leverage C) interest rate D) liquidity
Safe drivers buying "accident forgiveness" insurance tend to
a. Become even safer drivers b. Engage in more risky driving c. Engage in less risky driving d. Not change their driving patterns
Which of the following explains most clearly why business owners have a strong incentive to strive for operational efficiency?
a. They recognize that operational efficiency promotes the public interest. b. As residual claimants, owners will receive a higher income from increased efficiency. c. The owners will be able to keep production costs low by providing free managerial services to the firm. d. The owners will be able to gain by paying employees below market wages, which will improve the overall efficiency of the economy.
(Advanced analysis) Indy has $2,000 invested in a financial asset earning an annually compounded interest rate of 6 percent. Approximately how many years will it take before Indy's investment is worth $5,000?
A. 25. B. 10.5. C. 12.8. D. 15.7.