Another Way to State the Efficient Market Condition Is That

question 30

Multiple Choice

Another way to state the efficient market condition is that in an efficient market,

• A) unexploited profit opportunities will be quickly eliminated.
• B) unexploited profit opportunities will never exist.
• C) arbitrageurs guarantee that unexploited profit opportunities never exist.
• D) both A and C of the above occur.

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Definitions:

Minimum ATC

Refers to the lowest point on the Average Total Cost curve, where a firm is producing goods at the minimum possible cost per unit.

P > MC

A condition suggesting that the price of a product is greater than its marginal cost, which is often used to indicate potential profitability in a competitive market.

Payoff Matrix

A table that shows the potential outcomes of a strategic decision made by two or more players, highlighting the benefits or losses based on each player's decisions.

Dominant Strategy

A strategy in game theory that is best for a player, regardless of the strategies chosen by other players.