Exhibit 9-1 -Refer to Exhibit 9-1. If the Market Demand Curve Is

question 71

Multiple Choice

Exhibit 9-1
-Refer to Exhibit 9-1. If the market demand curve is D₁, what happens in the long run?

• A)Firm entry occurs.
• B)Firm exit occurs.
• C)Some firms increase capital input.
• D)Some firms increase labor input.
• E)Most firms do nothing.

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Definitions:

Stockholders' Equity

The residual interest in the assets of an entity that remains after deducting its liabilities, often referred to as shareholders' equity or owners' equity.

Effective-Interest Method

A technique used in accounting to allocate the interest expense or income on a bond or loan over its lifetime, based on the effective interest rate rather than the stated rate.

Bonds

A fixed-income investment representing a loan made by an investor to a borrower, typically corporate or governmental, which includes terms regarding interest payments and the return of principal at maturity.

Issue Price

The price at which new shares, bonds, or other securities are offered to the public or to existing shareholders for the first time.