A Perfectly Competitive Market

question 502

Multiple Choice

A perfectly competitive market

• A)may not be in the best interests of society, whereas a monopoly market promotes general economic well-being
• B)promotes general economic well-being, whereas a monopoly market may not be in the best interests of society.
• C)and a monopoly market are equally likely to promote general economic well-being.
• D)is less likely to promote general economic well-being than a monopoly market.

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Definitions:

IRR

Internal Rate of Return; a financial metric used to evaluate the profitability of a potential investment, calculating the discount rate at which the net present value of costs and benefits equals zero.

Cost of Capital

The necessary rate of earnings a firm must obtain from its investments to preserve its market worth and secure capital.

Initial Investment

The amount of money invested at the start of a project or business venture to get it off the ground.

Positive Future Cash Flows

The expectation or projection of an increase in the amount of money flowing into a company over a period of time, typically resulting from operations, investments, or financing activities.