Projects That Are Negatively Correlated

question 59

Multiple Choice

Projects that are negatively correlated

• A) cut down the maximum profit potential for the firm.
• B) increase the possible losses of the firm.
• C) are generally in the same industry.
• D) none of the other answers are correct.

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Definitions:

Profit-Maximizing

A strategy or level of production where a firm makes the highest possible profit.

Firm

A business organization, such as a corporation, limited liability company, partnership, or sole proprietorship, that sells goods or services.

Fixed Costs

Business expenses that are not affected by the level of goods or services produced by the business, such as rent, salaries, and insurance.

Price-Taking

A market condition where individual buyers or sellers have no influence over the price of a product due to its abundance in the market and the presence of many competitors.