In a Market That Is Characterized by Free Entry and Exit

question 41

True/False

In a market that is characterized by free entry and exit, profit serves the function of drawing new firms into the industry when it is greater than normal and causing some firms to leave when it is less than normal.

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Definitions:

Paying

The act of disbursing or settling a financial obligation.

Term Deposit

A type of bank deposit that is held at a financial institution for a fixed term or period of time, often yielding higher interest rates.

Matures

Refers to the final payment date of a financial instrument at which point the principal (and all remaining interest) is due to be paid.

Days

A unit of time measurement that typically represents a 24-hour period.