A Supply Curve Is Likely to Be Flatter for a Firm

question 32

True/False

A supply curve is likely to be flatter for a firm that has excess productive capacity.

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Definitions:

Growth Determinant

Factors that influence the expansion and development of a company, sector, or economy, including technology, government policy, and market demand.

Sustainable Growth Rate

The rate at which a company can grow its sales, earnings, and dividends without borrowing new funds.

Debt-equity Ratio

A gauge of a company's use of borrowing relative to the equity provided by its shareholders, determined by dividing liabilities by shareholders' equity.

Plowback Ratio

The proportion of earnings that a company reinvests in its business rather than distributing to shareholders.