Any Industry That Buys a Large Fraction of the Output

question 75

Multiple Choice

Any industry that buys a large fraction of the output of an increasing cost industry:

• A) could be an increasing cost industry, but not necessarily.
• B) must be an increasing cost industry.
• C) must be a constant cost industry.
• D) must be a decreasing cost industry.

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Definitions:

Retained Earnings

The portion of a company’s net profits which is kept within the company instead of being paid out to the shareholders as dividends.

Dividend Reinvestment Plans

Programs that allow investors to automatically reinvest their cash dividends into additional shares or fractional shares of the underlying stock.

Open Market

A freely competitive market where buyers and sellers can engage in transactions with minimal government intervention.

Debt Ratio

A financial ratio that measures the extent of a company's or individual's leverage in relation to the assets they own.