Stock in Frozen Dreams, an Ice Cream Manufacturer, Has a Price

question 4

Essay

Stock in Frozen Dreams, an ice cream manufacturer, has a price to earnings ratio of 24. Is this comparatively high or low? What are two explanations for the size of this company's price to earnings ratio?

Recognize the impact of market entry and exit on industry prices and profits in the long run.

Differentiate between accounting profit and economic profit.

Describe the characteristics of a perfectly competitive market.

Explain the significance of the minimum points on average total cost and average variable cost curves.

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