The Price a Dealer Is Willing to Pay for a Security

question 73

Multiple Choice

The price a dealer is willing to pay for a security is called the ___________ price, which is also the ___________ of the two prices quoted for any security.

• A) Ask; higher
• B) Bid; lower
• C) Bid; higher
• D) Ask; lower
• E) Spread; medium

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Definitions:

Short Run

A period during which at least one factor of production is fixed, limiting the ability to adjust to changes in market demand.

Barriers to Entry

Barriers that impede or block new entrants from smoothly accessing a market or business sector.

Plant Size

Plant size refers to the capacity or physical dimensions of a facility where goods are produced, impacting the volume of production and potential economies of scale.

Diminishing Marginal Returns

A principle stating that as investment in a particular area increases, the rate of profit from that investment, after a certain point, cannot continue to increase and may decrease.