Firms That Operate in Competitive Product Markets and Choose to Practice

question 406

Multiple Choice

Firms that operate in competitive product markets and choose to practice discrimination in hiring workers

• A)will survive if they increase production and garner a larger market share.
• B)will eventually earn zero economic profits.
• C)will survive as long as they are willing to have a smaller market share.
• D)are likely to eventually go out of business.

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Definitions:

Effective Annual Interest Rate

The interest rate on a loan or financial product restated from the nominal rate as an annual rate that reflects compounding over a given period.

Cash Cycle

The period of time it takes for a company to convert its investments in inventory and resources into cash flows from sales.

Receivables Period

The average number of days it takes for a company to collect payments from its customers.

Inventory Period

The average time it takes for a company to sell its inventory and convert it into sales.