When Entry and Exit Behavior of Firms in an Industry

question 143

Multiple Choice

When entry and exit behavior of firms in an industry does not affect a firm's cost structure,

• A)the long-run market supply curve must be horizontal.
• B)the long-run market supply curve must be upward-sloping.
• C)the long-run market supply curve must be downward-sloping.
• D)we do not have sufficient information to determine the shape of the long-run market supply curve.

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Definitions:

Conflicts of Interest

Situations where a person or institution has multiple interests, and serving one interest could involve working against another, potentially leading to ethics concerns.

Compensation Packages

The combination of salary, benefits, and other forms of payment provided to employees for their work.

Firm Value

The total market value of all of a company's outstanding shares, representing the overall value of the company as determined by investors.

Accounting Flexibility

The degree of choice companies have in how they implement and apply financial reporting practices.