Clustering

question 29

Multiple Choice

Clustering:

• A)occurs when government resources are diverted toward one particular sector of the economy.
• B)takes place when new firms enter regions already thick with other firms in the same or similar industries.
• C)occurs when there is a single firm in the economy that can charge different prices for the same product.
• D)implies that consumers with similar tastes and preferences tend to stay in the same region.
• E)occurs when all the firms in the industry sell identical commodities and charge identical prices for these commodities.

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Definitions:

Beta

A gauge of the level of variability, or consistent risk, attached to a security or portfolio against the backdrop of the broader market.

Treasury Bills

Short-term government securities with maturities of one year or less, considered a safe and liquid investment.

Debt-equity Ratio

A numerical expression that demonstrates how a company's assets are financed through shareholders' equity and debt, typically used to analyze financial leverage.

Weighted Average Cost

A calculation that takes into account the varying costs of different sources of capital, weighted by their proportions in the capital structure.