In the Short Run, Firms Can Enter an Industry but Not

question 268

True/False

In the short run, firms can enter an industry but not exit an industry.

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Definitions:

Warrant Attached

An option issued by a company that gives the holder the right to purchase the company’s stock at a specific price before expiration.

Ex-rights

Denotes a security that is trading without the right to receive the most recently announced rights offering.

Additional Paid-in Capital

The amount of money investors have paid to a company above and beyond the par value of the shares they have purchased.

Cumulative Preferred Stock

A type of preferred stock where dividends accumulate if not paid in any given year, ensuring that dividends must be paid out to preferred stockholders before common stockholders receive any.