The Entry of an Additional Firm into a Market Shifts

question 217

True/False

The entry of an additional firm into a market shifts the demand curve for the original firm to the left.

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Definitions:

Return on Investment

A measure of the profitability of an investment, calculated by dividing the net profit by the initial cost of the investment.

Controllable Direct Fixed Costs

Expenses that do not vary with production volume and can be altered or influenced by management in the short term.

Noncontrollable Direct Fixed Costs

Fixed costs that cannot be altered or influenced by the decisions of management in the short term.

Indirect Fixed Costs

Costs that are incurred for the benefit of more than one profit center.