A New Production Technique That Reduces Costs for a Price-Taking

question 112

Multiple Choice

A new production technique that reduces costs for a price-taking firm in a competitive market will result in

• A) widespread industry adoption and a lower price to consumers.
• B) industry consolidation.
• C) sustained positive economic profit for the first firms that adopt the technique.
• D) a rightward shift in the demand curve.
• E) entry by new firms.

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Definitions:

Wholly Owned Subsidiary

A company whose entire stock is held by another company, making it completely controlled by the parent company.

Regular Course

Conduct or actions taken in the normal and usual manner of business or daily operations.

Appraisal Remedy

A legal recourse for shareholders, allowing them to obtain a judicial determination of the fair value of their shares when they dissent from certain corporate actions.

Attack Validity

To challenge or question the legitimacy, effectiveness, or truth of something, often used in legal contexts.