Firm A producing one good acquires another firm B producing another good. The cross price elasticity ...

Firm A producing one good acquires another firm B producing another good. The cross price elasticity of demand for the goods owned by each firm is -1.4 . Holding other things constant, the acquiring firm should
 a. Raise prices on both goods
  b. Lower prices on both goods
  c. Raise price on the acquired good only
  d. Need more information

QUESTION 2

The degree of operating leverage is equal to the ____ change in ____ divided by the ____ change in ____.
 a. percentage; sales; percentage; EBIT
  b. unit; sales; unit; EBIT
  c. percentage; EBIT; percentage; sales
  d. unit; EBIT; unit; sales
  e. none of the above

QUESTION 3

Vertical contracts that aim to decrease retailer prices typically
 a. Benefit the consumer, hurt the manufacturer and the retailer
  b. Benefit the manufacturer, hurt the consumer and retailer
  c. Benefits the consumers, manufacturers and retailers
 d. Hurts all the manufacturers, consumers and retailers

QUESTION 4

Firm A producing one good acquires another firm B producing another good. The cross price elasticity of demand for the goods owned by each firm is 2.6 . Holding other things constant, the acquiring firm should
 a. Raise prices on both goods
  b. Lower prices on both goods
  c. Raise price on the acquired good only
  d. Need more information

QUESTION 5

In the linear breakeven model, the breakeven sales volume (in dollars) is equal to fixed costs divided by:
 a. unit selling price less unit variable cost
  b. contribution margin per unit
  c. one minus the variable cost ratio
  d. a and b only
  e. a, b, and c

QUESTION 6

Vertical contracts that aim to decrease retailer prices typically
 a. Benefit the consumer and the manufacturer but hurt the retailer
  b. Benefit the manufacturer and retailer but hurt the consumer
  c. Benefits the consumers, manufacturers and retailers
 d. Hurts all the manufacturers, consumers and retailers