Related to the Economics in Practice on Page 198: If

question 56

Multiple Choice

Related to the Economics in Practice on page 198: If firms have long-run average cost curves with a long, flat section

• A) their long run supply curves are downward sloping.
• B) the optimal number of firms in the industry is one.
• C) larger firms have a cost advantage over smaller firms.
• D) it is impossible to predict the size of the firm.

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Definitions:

Shares Outstanding

The total number of a company's shares that are currently owned by all its shareholders, including share blocks held by institutional investors and restricted shares owned by the company’s officers and insiders.

Market Price

The price at which an asset or service is currently being traded in the marketplace.

Acquisition

The method of gaining control over another corporation by buying its shares or assets.

Incremental Value

The added value or additional benefits generated from a decision, investment, or action compared to its absence.