If the stock price of a company is higher than the discounted value of its future earnings,
a. Buy the stock only if the company has a sustained competitive advantage
b. Don't buy the stock, even if the company has a sustained competitive advantage
c. Always buy the stock
d. None of the above
b
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The price of pizza falls by 25 percent. If the elasticity of demand for pizza is equal to –1.5, what will happen to the quantity of pizza demanded?
What will be an ideal response?
Vertical contracts between manufacturers and retailers often aim to
a. Incentivize the retailers to undertake costly activities, which they otherwise may not realize the full benefits of on their own b. Serve as a "signal" of the manufacturer's belief of the likely success of his product c. Reimburse the retailer for the cost of managing an extended inventory d. All of the above