Good Capital Investment Opportunities Are Most Likely to Exist When

question 74

Multiple Choice

Good capital investment opportunities are most likely to exist when

• A) many firms compete to sell similar products.
• B) interest rates are high and rising.
• C) goods and services can be produced cheaply using readily available tools and technologies.
• D) a line of business is expensive to enter and uses proprietary technology.

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Definitions:

Quantity-fixing Agreements

involve deals or arrangements between competing businesses to restrict output levels, aiming to influence market prices or conditions.

Price-leadership Model

A market strategy where one dominating firm sets the price for its product, and other firms in the industry follow suit, often observed in oligopolistic markets.

Dominant Firm

A company that has a large portion of market share in its industry, giving it significant power to influence market conditions and prices.

Economic Incentives

Monetary or other rewards used to motivate individuals or entities to perform certain actions beneficial to economic objectives.