Answer:
(A) A wholly owned Subsidiary
Explanation:
A wholly owned subsidiary is a company that is completely owned by another company called the Parent/Holding Company. The parent company will hold all (100%) of the subsidiary's common stock.
A wholly owned subsidiary allows the parent company to diversify, manage, and possibly reduce its risk.
Some of the disadvantages of a wholly owned subsidiary include the possibility of multiple taxation, lack of business focus, and conflicting interest between subsidiaries and the parent company if not properly managed.
To solve this question, first we need to find out the price of a single donut.
12 donuts = $ 6.00
1 donuts = $6.00 / 12
1 donuts = $ 0.50
After that, we just need to multiply the price for a single donut with the required amount (9), which will be:
9 x $ 0.50 = $ 4.50 . . . . for 9 donuts
Answer:
b. would leave the market first if the price were any lower.
Explanation:
In the market, the producer always sells more than the economic cost ( raw materials and labor cost) that he bears during production. The marginal seller means that the seller earns zero economic profit ( producer surplus) i.e. an economic cost equals the selling price. So if the price falls then the marginal seller would leave the market first because he will be indifferent when earns the zero economic profit but when the price falls he would leave the market.
