Suppose You Observe That Output in an Industry Occurs on the Inelastic

question 37

Multiple Choice

Suppose you observe that output in an industry occurs on the inelastic part of the market demand curve.Which of the following can you conclude from this?

• A)The industry is definitely behaving as a monopoly that is protected by barriers to entry.
• B)The industry is definitely not behaving as a monopoly that is protected by barriers to entry.
• C)The industry could be perfectly competitive.
• D)The industry is definitely not perfectly competitive.
• E)Both (a) and (d)
• F)Both (b) and (c)
• G)Both (b) and (d)
• H)None of the above

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Definitions:

Dividend Prospects

The potential for future dividend payments from investments, often assessed to evaluate the attractiveness of stocks.

Future Interest Rates

Expected rates of interest in the future, affecting everything from loans to investments.

Abnormal Return

The difference between the actual return of an investment and the expected return based on the risk and market's overall returns.

Sales Increase

An upward movement in the quantity sold or the revenue generated from the sale of a product or service over a specific period.