Use the Table Below to Answer the Following Question

question 121

Multiple Choice

Use the table below to answer the following question.
Table 14.2.1

-Refer to Table 14.2.1. Sara is a dot.com entrepreneur who sells sweatshirts. She pays $1,000 a week for her Web server and Internet connection. She pays the firm that makes the sweatshirts $20 a sweatshirt. Sara has no other costs. The table sets out the demand schedule for Sara's sweatshirts. Other firms ________ enter the Web sweatshirt business and compete with Sara. In the long run, the demand for Sara's sweatshirts ________ and her economic profit ________.

• A)will; decreases; falls to zero
• B)will not; decreases; falls to zero
• C)will; increases; increases
• D)will not; increases; increases
• E)will; increases; falls to zero

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Definitions:

Expected Returns

The predicted average return of an investment portfolio over a specified period.

Corresponding Weights

The proportions or percentages allocated to different assets in a portfolio, determining the impact of each asset's performance on the overall portfolio return.

Correlation Coefficient

A statistical measure that calculates the strength and direction of a linear relationship between two variables on a scatterplot.

Covariance

A measure of how two variables move together, indicating the direction of their linear relationship.