In the Short Run

question 118

Multiple Choice

In the short run

• A) existing firms do not face limits imposed by a fixed input.
• B) all firms have costs that they must bear regardless of their output.
• C) new firms can enter an industry.
• D) existing firms can exit an industry.

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Definitions:

Amortization Expense

The method of incrementally expensing the original value of an intangible asset throughout its period of utility.

Straight-Line Amortization

A method of gradually writing off the nominal value of an intangible asset over its useful life in equal installments.

Business Combination

A transaction or other event in which an acquirer gains control over one or more businesses, possibly resulting in a new entity.

Fair Value Increment

The increase in the recorded cost of an asset over its previously recognized value, often assessed during business combinations to reflect current market valuations.