The Accompanying Graph Shows the Long-Run Supply and Demand Curves

question 119

Multiple Choice

The accompanying graph shows the long-run supply and demand curves in a purely competitive market. The curves suggest that in this industry, the dollars' worth of other products that have to be sacrificed in order to produce each unit of the output of this industry is

• A)constant.
• B)increasing.
• C)decreasing.
• D)not indicated in the graph.

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Definitions:

Solvency Ratios

Ratios that measure a company’s ability to meet its long-term obligations.

Earnings Per Share

A financial metric that represents the portion of a company's profit allocated to each outstanding share of common stock, serving as an indicator of the company's profitability.

Treasury Stock

Shares that the issuing company initially distributed and then bought back, decreasing the total number of shares available for trade in the market.

Price/Earnings Ratio

A financial ratio that compares a company's share price to its earnings per share, indicating the value that investors are ready to pay for each dollar of earnings.