The Textile Industry Is Composed of a Large Number of Small

question 256

Multiple Choice

The textile industry is composed of a large number of small firms. In recent years, these firms have suffered economic losses, and many sellers have left the industry. Economic theory suggests that these conditions will

• A)shift the demand curve outward so that price will rise to the level of production cost.
• B)cause the remaining firms to collude so that they can produce more efficiently.
• C)cause the market supply to decline and the price of textiles to rise.
• D)cause firms in the textile industry to suffer long-run economic losses.

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Definitions:

Bond Discounts

The variance between a bond's stated value and the amount it fetches on the market when it ends up selling for beneath that stated value.

Bond Premiums

The amount by which the market price of a bond exceeds its face value, typically due to interest rates being lower than the bond's coupon rate.

Term Bond

A term bond is a type of bond that has a fixed maturity date at which the principal amount is to be paid back to investors.

Maturity Date

The specific date on which the principal amount of a bond, loan, or other financial instrument is due to be paid in full.