The Board of Directors of Minerva Corporation Has Recognized the Need

question 19

Multiple Choice

The board of directors of Minerva Corporation has recognized the need for innovation. Several of the board members are strongly arguing for internal innovation, while other directors are in favor of acquiring another firm. The persons in favor of acquisition are probably

• A) the CEO and chairman of the board.
• B) outside directors with equity positions in the firm.
• C) inside directors with equity positions in the firm.
• D) outside directors without equity positions in the firm.

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Definitions:

Long-run Equilibrium

A state in which all firms in a market are earning zero economic profits, ensuring that no firm has an incentive to enter or exit the market.

Industry

Describes the aggregate of manufacturing or technically productive enterprises in a particular field, often named after its principal product.

Demand Curve

A chart that illustrates how the price of a product correlates with the amount consumers are ready to buy at different price levels.

Perfectly Competitive

A market structure characterized by many buyers and sellers, all of whom are producing identical products, leading to no single participant having control over the price.