If Competitive Market Circumstances Are Such That There Are Few

question 187

Multiple Choice

If competitive market circumstances are such that there are few sellers who are sensitive to each other's prices, and the purpose of advertising is to inform but avoid price competition, then ________ must exist in the industry.

• A) a pure monopoly
• B) monopolistic competition
• C) pure competition
• D) an oligopoly
• E) oligopolistic competition

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Definitions:

Earnings Rate

The return on an investment or the amount of profit made compared to the amount of money invested.

Internal Rate of Return

An investment’s projected rate of return, calculated by finding the discount rate that sets the net present value of all cash flows (both positive and negative) to zero.

Present Value

Present value is the current worth of a future sum of money or stream of cash flows, given a specified rate of return, adjusting for the time value of money.

Annuity

An annuity is a financial product that pays out a fixed stream of payments to an individual, typically used as an income stream for retirees.