In a Decreasing-Cost Industry

question 102

Multiple Choice

In a decreasing-cost industry,

• A)there will be no firm entry because the increased supply will reduce the long-run equilibrium price.
• B)the law of demand does not apply.
• C)greater demand leads to higher long-run equilibrium prices.
• D)lower demand leads to higher long-run equilibrium prices.

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Definitions:

Incompetent Management

Refers to a scenario where corporate or organizational leaders lack the skills, abilities, or judgment to make effective decisions, often leading to poor performance.

Proxy Fights

Strategies employed by shareholders to influence company management and policies by voting on corporate issues, often seen in contests for control of the board.

Nonfinancial Businesses

Companies whose primary activities involve the production or supply of goods and services, rather than financial transactions and investments.

Real Asset(s)

Physical or tangible assets that have intrinsic value such as real estate, commodities, and natural resources.