In a Constant-Cost Industry, Input Prices Remain Constant As

question 71

Multiple Choice

In a constant-cost industry, input prices remain constant as:

• A) the supply of inputs fluctuates.
• B) firms encounter diseconomies of scale.
• C) workers become more experienced.
• D) firms enter and exit the industry.

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Definitions:

Required Return

The minimum return an investor expects to achieve by investing in a particular asset or project.

Operating Cash Flow

The amount of cash generated by a company’s normal business operations, indicating whether a company is able to generate sufficient positive cash flow.

Top-Down Approach

An investment strategy that begins with analyzing macroeconomic factors, then drilling down to the industries and finally individual companies to make investment decisions.

Net Initial Investment

The total upfront cost required to initiate an investment, including all relevant expenses minus any cash inflows.