Suppose That the Normal Rate of Return in the Inkjet

question 31

Multiple Choice

Suppose that the normal rate of return in the inkjet printer industry is 10% and the return being earned by firms in this industry equals exactly 5%. Which of the following is likely to follow from this scenario?

• A) Firms will collude to keep competition out.
• B) New firms will want to enter the industry.
• C) Firms will want to leave the industry.
• D) The normal rate of return will fall to 5% in the long run.

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Definitions:

Advertising

The nonpersonal communication of information paid for by an identified sponsor, for example, an individual or an organization.

Electronic Collection

The process of collecting payments, debts, or other obligations electronically, via online transactions or electronic payment systems.

Business Cards

Small cards containing professional contact information that are exchanged in business contexts to facilitate networking and communication.

Cognitive Dissonance

The psychological discomfort experienced by an individual when holding two or more conflicting beliefs, values, or ideas, often leading to a change in attitude or behavior.