The Over-The-Counter Markets

question 59

Multiple Choice

The over-the-counter markets:

• A)are also known as quote-driven markets
• B)have dealers who provide transactional immediacy
• C)have dealers who act as market markers
• D)have dealers who act as principals because they trade on their own behalf and hold a position.
• E)All of these.

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Definitions:

Economic Profits

The excess of total revenues over total costs, including both explicit costs and opportunity costs, indicating a return beyond the normal profit level.

Accounting Profits

The net earnings of a company as calculated by subtracting total expenses from total revenues, according to standard accounting practices.

Perfect Competitor

A theoretical market structure where many firms sell homogeneous products, entry and exit from the market are free, and all participants have perfect information.

Perfectly Elastic

Perfectly elastic describes a situation where the quantity demanded or supplied changes by an infinite amount in response to any change in price, represented graphically as a horizontal line.