Although Several Stock Indexes Are Available to Inform Investors of Market

question 14

Multiple Choice

Although several stock indexes are available to inform investors of market changes, the Dow Jones Industrial Average:

• A) is the broadest-based of the market indexes.
• B) is the only reliable market index.
• C) accounts for approximately 70% of U.S. market value.
• D)is the best-known of the U.S. market indexes.

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Definitions:

Equilibrium Price

The market price at which the quantity of goods supplied is equal to the quantity of goods demanded.

Reaction Curve

A graph that shows how one player's optimal strategy choice depends on the strategy choice of another player.

Bertrand Model

An economic model of competition among firms in which they simultaneously choose prices rather than quantities, with the assumption that consumers choose the firm with the lowest price.

Collusion

An agreement among firms to limit competition, set prices, or control production in order to increase profits.