In a(n) ________ structure, there are a relatively small number of sellers, each holding substantial market share, in a market with many buyers
A) monopoly
B) oligopoly
C) monopolistic competition
D) perfect competition
E) natural competition
B
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When a liability is accrued, the account debited in the transaction is a stockholders' equity account
a. True b. False Indicate whether the statement is true or false
Which of the following is typically associated with cookie jar reserves?
a. Purchased in-process research and development b. Recognizing very high bad debt expense when earnings are high c. Recognizing revenue when a contract is signed prior to delivery of goods or performance of services d. Proforma earnings
When the total fixed costs decrease, the contribution margin per unit ________
A) increases B) decreases C) remains the same D) decreases proportionately
Firm M's earnings and stock price tend to move up and down with other firms in the S&P 500, while Firm W's earnings and stock price move counter cyclically with M and other S&P companies. Both M and W estimate their costs of equity using the CAPM, they have identical market values, their standard deviations of returns are identical, and they both finance only with common equity. Which of the following statements is CORRECT?
A. M should have the lower WACC because it is like most other companies, and investors like that fact. B. M and W should have identical WACCs because their risks as measured by the standard deviation of returns are identical. C. If M and W merge, then the merged firm MW should have a WACC that is a simple average of M's and W's WACCs. D. Without additional information, it is impossible to predict what the merged firm's WACC would be if M and W merged. E. Since M and W move counter cyclically to one another, if they merged, the merged firm's WACC would be less than the simple average of the two firms' WACCs.