In the Long Run in a Competitive Market

question 28

Multiple Choice

In the long run in a competitive market,

• A)existing firms can increase their plant size,and new firms can enter the market
• B)existing firms can increase their plant size,but the number of firms is the market is fixed
• C)new firms can enter the market,but existing firms cannot vary their plant size
• D)new firms can enter the market,but only if existing firms decrease their plant size in the short run
• E)existing firms can increase their plant size,only if some other firms exit

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Definitions:

Support Level

In technical analysis, this refers to a price level below which a security or market tends not to fall.

Primary Trend

A long-term movement in stock market prices, typically lasting for a year or more, indicating the general direction of the market.

Mental Accounting

A concept in behavioral finance where individuals classify, interpret, and prioritize money, often leading to irrational decision-making.

Fundamental Risk

The risk associated with inherent operational, financial, and market factors affecting an investment.