Price Is Constant to the Individual Firm Selling in a Purely

question 165

Multiple Choice

Price is constant to the individual firm selling in a purely competitive market because

• A)the firm's demand curve is downsloping.
• B)of product differentiation reinforced by extensive advertising.
• C)each seller supplies a negligible fraction of total supply.
• D)marginal costs are constant.

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Definitions:

Par Value

The nominal or face value of a bond, share of stock, or coupon as indicated on a bond or stock certificate.

Fair Value

The cost incurred or received during the sale of an asset or transfer of a liability in a systematic transaction among market actors on the valuation date.

Undervalued

An economic condition where the market price of an asset falls short of its intrinsic or real value as evaluated by investors.

Overvalued

A descriptor for an asset or stock whose price is believed to be higher than its intrinsic value.