Examlex
We calculate the PE ratio as the stock price divided by earnings per share so that both stock price and earnings are expressed on a per share basis.
Competitive Price-searcher
A market condition where firms have some degree of market power, allowing them to set prices above marginal cost but still requiring them to consider competitors’ prices.
Rival Firms
Companies that compete directly with one another in the same industry or market.
Downward-sloping Demand
A market phenomenon where demand for a product decreases as the price increases, indicating consumers buy less of the product at higher prices.
Competitive Price-searcher
A firm operating in a market where it must search for the optimal price that balances its desire for profits with the need to remain competitive.
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