In a market economy, what determines whether an entrepreneur will continue in business or terminate the production of a new product
What will be an ideal response?
the profit or loss of a business
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In the case of a positive externality, in order to achieve efficiency the government must set the _________________ equal to the marginal ____________________.
A. tax; external costs B. tax; external benefits C. subsidy; external costs D. subsidy; external benefits E. subsidy; private costs
The rate of return of a stock held for one year equals
A) the change in the price of the stock. B) the dividend yield plus the rate of capital gain. C) the rate of capital gain minus the dividend yield. D) the dividend yield minus the rate of capital gain.
In the absence of financial frictions, ________
A) interest rates for different borrowers move closely together B) all loans in the economy are transacted at a common interest rate C) the level of output is not affected by changes in the real interest rate D) an increase in inflation leads to a decrease in the real interest rate
Strategic dependence is found in
A) monopoly markets. B) oligopolistic markets. C) monopolistic competitive markets. D) perfect competitive markets.