When Resources Move from a Low-Profit Industry into a High-Profit

question 30

Multiple Choice

When resources move from a low-profit industry into a high-profit industry,:

• A) supply in the low-profit industry decreases, raising the market price.
• B) demand in the low-profit industry decreases, lowering the market price.
• C) supply in the high-profit industry decreases, raising the market price.
• D) supply in the high-profit industry increases, raising the market price.

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Definitions:

Expansion Policy

A strategy or set of guidelines that an organization follows to grow its business operations, either by expanding into new markets, increasing product lines, or enhancing capacity.

Cash Stream

A series of incoming and outgoing cash transactions over a period of time.

Capital Appreciation

An increase in the value of an asset or investment over time, not including dividends or interest earnings.

Tax Implications

The effect that various financial transactions and investment decisions have on the tax burden of an individual or business.