In Order for a Market to Support Superstars It Must

question 29

Multiple Choice

In order for a market to support superstars it must have which of the following characteristics?

• A) It must be involved in professional athletics.
• B) Every customer must be indifferent to the price they pay and the seller must be a competitor in the market for the product.
• C) Every customer must be willing to pay an enormous amount for the product and the product must be a necessity.
• D) Every customer must want the good supplied by the best producer and the technology must exist for the best producer to supply every customer at low cost.

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Definitions:

Efficient Frontier

A concept in portfolio theory representing the set of optimal portfolios offering the maximum expected return for a given level of risk or the minimum risk for a certain level of expected return.

Degree-Of-Risk Tolerance

The level of variability in investment returns that an investor is willing to withstand in their investment portfolio.

Risk Aversion

The preference to avoid uncertainty in investment decisions, showing a tendency to prefer safer investments over riskier ones.

Capital Gains Tax

The tax on the profit made from the sale of a non-inventory asset when the sale price exceeds the purchase price.