Free Entry Means That

question 36

Multiple Choice

Free entry means that

• A)there are no costs of entering into an industry.
• B)no legal barriers prevent a firm from entering an industry.
• C)a firm's marginal cost is zero.
• D)a firm has no fixed costs in the short run.

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Definitions:

Debenture

A type of debt instrument that is not secured by physical assets or collateral but based on the creditworthiness and reputation of the issuer.

Unsecured Debt

A type of debt or general obligation that is not protected by a guarantor, or collateralized by a lien on specific assets of the borrower.

Maturity

The time at which payment to a bondholder is due from the issuer, according to the bond's terms.

Investment-Quality

A designation given to securities or investments considered to offer lower risk and stable returns.