A publicly traded firm has 4 million shares of stock outstanding, with a current share price of $50. The value of its plant and equipment is $250 million. Its profit annually is $50 million. The average cost of capital is approximately
a) 5%
b) 10%
c) 15%
d) 20%
e) 25%
e) 25%
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Perfectly competitive markets are efficient because
A) they always reach equilibrium. B) firms in the market are price takers. C) the cost to society for producing the goods is exactly equal to the value that society places on the good. D) the long run equilibrium assures that the prices of resources will not increase.
A price ceiling set below the equilibrium price will result in a shortage
a. True b. False
A reserve requirement of 50 percent means a money multiplier of: a. 0.50. b. 2
c. 5. d. 50.
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a. The monopolist undersupplies the market and charges too high a price. b. The monopolist is a revenue maximizer not a profit maximizer. c. A monopolist has little incentive to produce efficiently (at a low cost). d. All of the above are true.