Which of the Following Is True Concerning Purely Competitive Industries

question 123

Multiple Choice

Which of the following is true concerning purely competitive industries?

• A) There will be economic losses in the long run because of cut-throat competition.
• B) Economic profits will persist in the long run if consumer demand is strong and stable.
• C) In the short run, firms may incur economic losses or earn economic profits, but in the long run they earn normal profits.
• D) There are economic profits in the long run but not in the short run.

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Definitions:

Convertible Bonds

A type of bond that can be converted into a predetermined amount of the company's equity at certain times during its life, usually at the discretion of the bondholder.

Average Number

This typically refers to the statistical measure calculated by summing the values in a set and dividing by the count of values, used in various contexts such as finance, math, and statistics.

Convertible Securities

Financial instruments, such as bonds or preferred shares, that can be converted into a specified amount of another asset, typically common stock, at a predetermined price or timing.

Fair Value

The price that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.