Factor Demand Is Called Derived Demand Because It

question 193

Multiple Choice

Factor demand is called derived demand because it:

• A)requires the use of other factors.
• B)depends on demand for the product that the factor produces.
• C)has a downward-sloping demand curve.
• D)has a constant marginal factor cost.

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Definitions:

Secondary Market

A market where investors buy and sell securities they already own rather than purchasing new issues from the issuing company.

Securities

Securities that signify either an equity stake in a publicly listed company, a debt interest in a corporation or government entity, or entitlements to ownership through options.

Floatation Costs

The comprehensive expenses involved in releasing new securities, encompassing fees for underwriting, legal services, and registration.

Firm Commitment

An underwriting agreement in which an underwriter agrees to buy all the unsold shares in an initial public offering (IPO).