We Can Predict That Resources Will Move into an Industry

question 105

Multiple Choice

We can predict that resources will move into an industry whenever

• A) economic profits for firms in that industry are greater than zero.
• B) accounting profits for firms in that industry are greater than zero.
• C) economic profits for firms in that industry are zero.
• D) accounting profits for firms in that industry are zero.
• E) economic losses for firms in that industry are minimized.

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Definitions:

Par Value

The nominal or face value of a bond, share of stock, or coupon as stated by the issuer.

Premium Capital

Capital that is obtained or raised at a value above its nominal or face value, often reflecting the additional amount paid by investors over the par value of securities or shares.

Stated Value

The nominal value assigned to no-par stock by the issuing company's board of directors.

Working Capital

The difference between a company's current assets and current liabilities, indicating short-term financial health and operational efficiency.