In the Long Run,if the Input Procurement Prices Increase as the Output

question 33

Multiple Choice

In the long run,if the input procurement prices increase as the output supplied by firms in an industry rises:

• A)the firms are operating in an increasing-cost industry.
• B)the firms' profit margins will increase.
• C)the firms are making positive economic profits.
• D)the firms' cost curves shift will downward.

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Definitions:

Treynor Measure

A performance metric for determining how well an investment compensates the investor for taking a risk, adjusted for the risk-free rate.

Beta

A rephrasing: A statistical estimate of a security's sensitivity to market movements, used to gauge its risk in comparison to the broader market.

Treynor Measure

A performance metric for determining how well an investment compensates the investor for taking a given level of market risk.

Beta

A measure of a stock's volatility in relation to the overall market; a beta greater than 1 indicates higher volatility than the market, and less than 1 indicates lower.