The CEO of JLI Corp. decided to expand into a new market in 2010. At the end of 2010, JLI's stock
price had decreased 5% since the beginning of the year. Which of the following statements is MOST
correct?
A) The CEO made a poor decision to expand because the stock price decreased during the year.
B) CEO decisions are irrelevant because the efficient market determines the value of a company's
stock.
C) The CEO's decision may have been optimal, keeping the stock price from falling more than
5% for the year.
D) The CEO made a poor decision to expand because the company's profits for the year
obviously decreased, causing the drop in stock price.
C
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Which of the following companies uses captive product pricing?
A) Photo Genie, which sells inexpensive cameras that run only on their own expensive batteries B) Tune Zone, which launched a range of mp3 player models, each priced according to its features C) Penguin's Parlor, which offers customers a 20-percent discount on their birthdays D) Sportsprint, which prices sports equipment according to customer evaluations E) Burger Den, whose combo meals are priced lower than its individual components sold together
As a manufacturer increases the price, ________
A) efficiency drops B) the break-even volume drops C) competition is minimized D) the total costs increase E) the profit margin shrinks