When Considering Perfect Competition the Absence of Entry Barriers Implies

question 369

Multiple Choice

When considering perfect competition the absence of entry barriers implies that

• A) no firm can enter the industry.
• B) firms can enter but cannot get out of the industry easily.
• C) all firms will earn economic profit.
• D) firms can enter and leave the industry without serious impediments.

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Definitions:

Merger Arbitrage

An investment strategy that aims to profit from the successful completion of mergers and acquisitions by trading the stocks of the companies involved.

Risk Profile

An evaluation of an individual's willingness and ability to take risks, as well as the risks associated with their investment assets.

Performance Evaluation

The assessment of how investments or portfolios have performed over time, considering factors like return, risk, and comparison to benchmarks.

Mispricing

The occurrence when the market price of a security does not accurately reflect its intrinsic or theoretical value, leading to potential buying or selling opportunities.