​The Main Reason(s)firms in a Competitive Market Cannot Earn Positive

question 22

Multiple Choice

​The main reason(s) firms in a competitive market cannot earn positive profits in the long run is(are)

• A)​assets can quickly move in and out of the industry when demand fluctuates
• B)an increase in demand leads to entry of firms which absorb the extra demand
• C)a decrease in demand leads to exit of firms from the market such that there is no surplus
• D)​all of the above

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Definitions:

Invoice Price

The price initially set by the manufacturer or provider for a product or service, usually before any discounts or increases for market forces.

Accrued Interest

Interest that has accumulated on a bond since the last interest payment was made but has not yet been paid to the bondholder.

Quote Sheet

A document or digital view listing the price quotes for various financial instruments or commodities, often used in trading.

Convertible Bond

A type of bond that can be converted into a predetermined amount of the company's equity, usually at the discretion of the bondholder.