When Firms Have an Incentive to Exit a Competitive Price-Taker

question 154

Multiple Choice

When firms have an incentive to exit a competitive price-taker market, their exit will

• A) lower market price.
• B) necessarily raise the costs of firms that remain in the market.
• C) raise profits for firms that remain in the market.
• D) reduce demand for the product.

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Definitions:

Vesting Date

The date on which an employee gains full control over the benefits or stock options granted as part of their compensation package.

Remuneration Expense

Costs incurred by an organization to compensate its employees, including salaries, wages, bonuses, and benefits.

Vesting Period

The time period an employee must wait before gaining access to the employer's contributions in a pension plan or stock options.

Incremental Fair Value

The additional amount that a company expects to earn from acquiring a new asset over its current market value.