To calculate the expected risk premium on a stock, one must subtract the risk-free rate from the stock’s expected return.
What is risk premiumIn general, what is meant by a risk premium is the additional yield or return obtained by investors or investors because they have chosen a type of market portfolio that carries risk rather than selecting risk-free assets. The risk premium can also be interpreted as the compensation or profit sought by market participants in order to avoid risk-averse market participants. That way, these market participants are able to bear the uncertainty inherent in the cash flows of a liability or asset.
Market risk premium formula and calculationFrom this definition, the market risk premium formula is as follows:
Market risk premium = Market return – Risk free return
In the capital asset pricing model (CAPM), the risk-free return represents the rate of return from an instrument
that is considered definitely safe. A widely cited example of a 10-year government bond.
For example, if the A city Composite Index (CI) has historically provided a return of 16% and a 10-year government bond yield is 7%, then the stock market risk premium is 9% (16%-7%).
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T or F: Investments with longer payback periods are more desirable, all else being equal.
Investments with longer payback periods are more desirable, all else being equal. - False
The payback period is the amount of time it takes for a project to generate enough cash flows to cover its initial investment. In general, investments with shorter payback periods are considered to be more desirable because they allow the investor to recoup their initial investment and start earning a return on their investment more quickly.
For example, an investment with a payback period of one year is considered to be more desirable than an investment with a payback period of five years, assuming that the investments have the same expected rate of return. There are many other factors affecting the desirability of an investment, like the risk level and the potential for future returns, so the payback period is just one consideration when evaluating an investment opportunity.
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which of the following is not a component of the risk premium? a) business risk b) unsystematic market risk c) financial risk d) liquidity risk e) exchange rate risk
Unsystematic risk does not affect a stock's risk premium because it only affects a single company or even an entire industry. It is also dangerous when it relates to a specific security.The correct option is B. market risk.
But the risk premium of a stock is not affected by it. Only systematic risk affects the risk Diversifiable risk and non-systematic risk are other names for unsystematic risk.Market risk is the option that a well-diversified investor in common stocks should select as their best answer. This word alludes to the probability of an investor suffering losses due to market conditions that have an impact on how well the financial markets perform. Therefore, it is clear that market risks are more important to a well-diversified investor in common stocks than the other risks described, such as specific, unsystematic, and diversification risks.
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______________ consists of all the activities concerned with obtaining money and using it effectively.
All actions involving getting money and successfully employing it are included in financial management.
What constitutes financial management?Simply expressed, the field of company management known as financial management deals with allocating the available financial resources in a way that maximizes corporate profitability and return on investment (ROI). Financial management experts are responsible for arranging, planning, and controlling all corporate transactions.
Which component of financial management is the most important?The most important part of any financial plan is creating a budget. Making a budget is not too difficult; the problem is keeping it! The important thing is that you have the self-control to put up the time and effort necessary to monitor and, in some cases, balance your expenditure.
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what is one way that gross domestic product differs from gross national product?
GDP is made up of products and services generated for market consumption as well as certain nonmarket production, including government-provided defense or educational services. Gross national product, or GNP, is a different concept that accounts for all national output.
How does gross domestic product differ from gross national product?GDP counts the commodities and services generated inside a nation's boundaries by both Americans and people from other countries. GNP counts only local and international goods and services generated by Americans.
The formula used to calculate GDP is the same for all nations worldwide and is done annually. On the other hand, Bhutan calculates the GNH annually and every five years for the World Happiness Report.
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in the small-country model, the price equals the world price if the country is open to trade. t or f
The given statement, in the small-country model, the price equals the world price if the country is open to trade, is true.
What takes place when a tiny nation imposes tariffs?National wellbeing declines whenever a tiny nation imposes a tariff. The loss to national welfare will increase when the tariff is raised. Income is redistributed as a result of the tariff. While consumers lose out, producers and the receivers of government spending profit. According to the "small country" assumption, the country's imports make up such a small portion of the global market that even a complete ban on imports would have no impact on global demand for the good and hence have little impact on global prices.
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the long-run aggregate supply curve would shift left if the amount of labor available
If there was a reduction in the amount of labor that was available or if Congress raised the minimum wage significantly, the aggregate supply curve would shift to the left over time.
What causes a change in the aggregate supply curve?Changes in inflationary expectations, variations in the labor force and capital stock, variations in government action (which is not the same as government spending), variations in productivity, and supply shocks all affect how the short-run aggregate supply curve behaves. Because resource prices adjust over time to changes in the price level, there is little incentive for businesses to shift their output, leading to a vertical long-run aggregate supply curve. Prices and wages have little long-term impact on the aggregate supply curve.
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what percent of americans earning more than $250,000 are living paycheck to paycheck?
20% of Americans earning $250,000 per year live paycheck-to-paycheck.
Earning is the internet advantage of an enterprise's operation. Profits are also the amount on which company tax is due. For an analysis of particular elements of company operations, numerous greater particular terms are used as EBIT and EBITDA.
3 of the principle kinds of profits are earned passive and portfolio. Earned profits include wages, income, hints, and commissions. Passive or unearned earnings may want to come from rental properties, royalties, and restricted partnerships. Portfolio or investment earnings include interest, dividends, and capital gains on investments.
Income is perhaps the unmarried most essential and maximum intently studied wide variety in a company's financial statements.
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a bank loan that imposes restrictions or covenants on the business decisions an entrepreneur makes concerning the company's operations is called a .
A commercial bank loan is a bank loan that places limitations or covenants on the business choices an entrepreneur makes regarding the company's activities.
A commercial bank is a kind of financial institution that accepts deposits from the general public and gives borrowers loans for consumption and investments that will yield profits. It can also refer to a bank, or a division of a huge bank, that deals with corporations or a large/middle-sized organisation, to separate it from a retail bank and an investment bank. Commercial banks include both banks in the public and private sectors. The word "bank" is derived from the Italian word "banco," which means "desk or bench." During the Italian Renaissance, Florentine bankers used this word to describe their workstation, which was covered in a green tablecloth. Nevertheless, there is historical proof of banking activity.
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in the breakthrough energy catalyst video case, investments are being made to develop technologies to convert biological inputs, including municipal waste, into what product?
There are investments being made that develop technology that turn biological inputs, such as municipal trash, into Sustainable Petroleum Products in the instance of the breakthrough energy catalytic video.
Energy catalyst: what is it?Energy Catalyst promotes the creation of technology and business plans to deliver clean, contemporary energy at competitive prices to Africa and Asia. It seeks to forge alliances, encourage learning, and provide funding for the trial and display of inventions.
What is a trigger for breakthrough energy catalyst?Breakthrough Energy Catalyst (BEC) is indeed a ground breaking funding initiative that unites businesses from across the private sector to support early commercial-scale innovations in order to hasten the adoption of vital climate technology.
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The complete question is-
In the breakthrough energy catalyst video case, investments are being made to develop technologies to convert biological inputs, including municipal waste, into what product?
a.Sustainable Aviation Fuel
b. Sustainable Aviation Fuel
c. Direct Air Capture
d. Long-duration Energy Storage
Are developing countries more dependent on agriculture?
Agriculture is critical to developing countries, both economically and in its potential to improve people's lives.
Agriculture or farming is the exercise of cultivating plant life and cattle. Agriculture turned into an important thing development in the upward push of sedentary human civilization, whereby farming of domesticated species created meals surpluses that enabled humans to live in towns. The records of agriculture started heaps of years ago.
Agriculture is the artwork and technology of cultivating the soil, developing vegetation and elevating livestock. It includes the coaching of plant and animal products for people to apply and their distribution to markets. Agriculture presents most of the arena's food and fabric.
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1.in recent advertisements the depiction of older adults as adventurous, active, and intelligent may be due to . a.their increased use of the internet b.increased respect by the younger generations c.the increased number of older adults leading advertisement agencies d.their increasing economic power
The portrayal of older persons in modern commercials as advertisements, intellectual, and active may be a result of their rising economic status. The right response in this case is option D.
Age has a variety of effects on physical exercise involvement, including for young toddlers to become confident movers, gross motor skills must be developed from an early age. People who do this typically take part more actively. Teenagers go through a growth spurt that alters their physical maturation.
Advertisers should take note of this since demographics like age are crucial to their marketing plans. Companies might increase the efficiency of their advertising initiatives by using that data.
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ortell corporation is interested in cutting the amount of time between when a customer places an order and when the order is completed. details for the first quarter of the year are provided here. choose the correct answer from the options provided. days wait time 12 inspection time 0.6 process time 6 move time 0.4 queue time 8 knowledge check 01 what is the manufacturing cycle efficiency (mce)?
MCE (manufacturing cycle effectiveness) = 40% Explanation The shorter the time between the date a client puts a purchase and when it is fulfilled, the better, according to Vertis Corporation.
My PG&E bill asks me what MCE is.The cost of making energy according to MCE. It also covers the price of the appropriate amount of power. It takes the place of the payment that PG&E would have to make if they were to supply your generation service. This isn't a separate fee.
What happens if I decide not to accept MCE?Users who decide to stop using the MCE service more than 60 days after signing up must pay a one-time cancellation fee of $5 (for domestic customers) or $25 (for business clients).
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umpqua defines other financial institutions that perform banking services as their competitors. therefore they take a/an ___________ of its competition.
Umpqua defines other financial institutions that perform banking services as their competitors. therefore they take an industry-based approach to its competition.
“A right away competitor offers the same products and services aimed at the same goal marketplace and purchaser base, with the same intention of income and marketplace percentage increase. this means that your direct competition is focused on the identical audience as you, selling the identical products as you, in a similar distribution model as you.”
There are four varieties of competition in a loose marketplace device: best competition, monopolistic opposition, oligopoly, and monopoly. under monopolistic competition, many sellers provide differentiated products—merchandise that fluctuate barely but serves similar functions.
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with an average cost pricing rule, the quantity produced by the natural monopoly is the quantity produced with a marginal cost pricing rule. group of answer choices equal to
The deadweight loss from the taxes essential to collect the funds for the support is excluded from the productivity advantages provided about by the application of the marginal social cost costing guideline.
In a monopoly, what does equilibrium price selling mean?
In order to set prices for commodities and services that are comparable to or nearly equivalent to the total value of making the product, authorities employ the approximate pricing rule. It is possible for managers or lawmakers to require a monopoly to set prices that are equal cost of manufacturing by using this priced rule.
The preceding formula is applied average costs:
By dividing the number of products from the average stock and acquisitions by the cost of the commodities that are listed for sale, you may determine average cost.
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bonds payable has a balance of $1,000,000 and discount on bonds payable has a balance of $24,000. if the issuing corporation redeems the bonds at 98, what is the amount of gain or loss on redemption?
Bonds payable have a balance of $1,000,000 and discount on bonds payable has a balance of $24,000. if the issuing corporation redeems the bonds at 98, $15,000 gain is the amount of gain or loss on redemption
(1,000,000-10,000) - (1,000,000x97.5)=990,000-975,000=15,000 gain.
A corporation is an organisation—usually a set of humans or a business enterprise—authorized by using the country to act as a unmarried entity and diagnosed as such in regulation for certain purposes. Early included entities were established through charter. maximum jurisdictions now allow the creation of latest groups through registration.
An organization is a business entity that is owned by means of its shareholder(s), who decide on a board of directors to supervise the corporation's sports. The agency is chargeable for the moves and price range of the enterprise – the shareholders aren't. An agency is continually a organization, however now not all corporations are corporations. The term business enterprise can check with many special enterprise structures, such as: Sole proprietorship: A sole proprietorship operates with one man or woman who handles all enterprise operations.
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How much annual income would you need to have if, using the 28/36 ratio, your maximum allowable recurring debt is $380? a. $16,290 b. $22,800 c. $57,000 d. $75,000 please select the best answer from the choices provided.
Using the 28/36 ratio, to have $380 maximum allowable recurring debt, your annual income should be $16,290 (option A)
Lenders utilize many criteria to decide whether or not to approve credit applications. One of the most important factors is a person's credit score. Before considering credit approval, they normally require that a credit score fall inside a particular range. However, a credit score is not the only factor to consider.
Another essential component is the 28/36 ratio, which determines a consumer's financial situation.
As part of their screening program, each lender determines their own parameters for housing debt and total debt. This means that household expenses, such as rent or mortgage payments, cannot exceed 28% of monthly or annual income. Likewise, total debt payments must not exceed 36% of income.
In the given problem, maximum allowable recurring debt is $380. This is a 28% from the monthly income.
Let p = monthly income, hence:
28% x p = 380
p = 380/28% = 1,055.56
Therefore,
annual income = 12 x 1,357.2 ≈ $16,290 (option A)
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bob's credit card charges him 14% interest on his unpaid balance. his bank is offering him 5% interest on a savings account. the first thing bob should do with any extra money he may have is to:
The first thing Bob should do with any extra money he may have is to pay the credit card charges which have 14% interest on his unpaid balance.
Explain the credit card charges.The credit card usually functions as a replacement for cash or a cheque and typically offers an unsecured revolving line of credit. Without taking into account fees paid to merchant service providers, credit card processing costs typically vary from 2.87% to 4.35% of each transaction. These expenses, which can build up and reduce your income as a small business owner, can be costly.
Moreover different operation of credit card fees exists and also provides strategies for reducing them. The amount of each transaction's credit card processing fee that a merchant may charge cannot exceed 4%. A surcharge on each transaction that covers the expense of the fee allows retailers to pass the cost on to the customer.
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the per-unit standards for direct labor are 1.5 direct labor hours at $15 per hour. if in producing 1600 units, the actual direct labor cost was $27900 for 1800 direct labor hours worked, the total direct labor variance is
The total direct labor variation is 7800 if the actual direct labor cost for producing 1600 units was $27900 for 1800 direct labor hours worked.
Labour Cost Variance Standard = Labour cost- Actual Labour Cost
= (1.5*2000*15) -37200
=7800 favourable
r=6%+0.9*8%=13.20%
r=(D1/P)+g\s13.20%=(1.50/13.39)
+g\sg=13.20%-(1.50/13.39)
The stock's price is equal to D1/(r-g)=1.50/(13.20%-4%) when g=2% because the growth rate has doubled.
=16.30
The ownership of a portion of the issuing company is represented by a stock, sometimes referred to as equity, which is a type of security. The term "shares" refers to the units of stock, each of which rights the owner to a certain percentage of the company's assets and profits, based on the number of shares they own.
The cornerstone of the portfolios of many individual investors is stocks, which are mostly bought and sold on stock exchanges. Government laws enforcing investor protection from dishonest tactics must be followed during stock exchanges.
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The only way to improve your credit score is to pay off your entire balance every month.a. Trueb. False
It is usually preferable to pay off the bill in full each month because carrying a balance hurts the credit score. Hence, the given statement is true. Option A is correct.
An individual's creditworthiness is shown by their credit score, which is a numerical expression based on a level analysis of their credit files. A credit report, which normally include data from credit bureaus, serves as the foundation for a credit score.
Lenders, like banks and credit card firms, use credit scores to assess the risk involved in lending money to clients and to reduce losses brought on by bad debt.
To decide who is eligible for a loan, at what interest rate, and with what credit limitations, lenders utilise credit ratings. Additionally, lenders utilise credit scores to identify the clients most likely to generate a profit.
Therefore, the given statement is true. Option A is correct.
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question content area the first item appearing on the statement of stockholders' equity is a.the ending balances of equity accounts b.dividends c.net income d.the beginning balances of equity accounts
The area first item appearing on the statement of stockholders' equity is b.dividends.
Dividend-making investment can be an exquisite funding strategy. Dividend shares have historically outperformed the S&P 500 with much less volatility. it is because dividend stocks provide two resources to going back: normal income from dividend bills and capital appreciation of the stock charge. This total return can upload over the years.
During the long term, dividends aren't lost money for the reason that a coins dividend reduces an employer's funds to be had for commercial enterprise investments. in which those investments can meet or beat what an individual investor can earn by investing the coins on their own.
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Use the following template to brainstorm ways a company might market the same
commodity to different segments of their market. The first row has been done for you as
an example.
TABLE 1 Market segments exercise
A commodity is a basic good that is used in trade and can be exchanged for other items of the same kind. The majority of the time, commodities are used as raw materials to create other products or services.
Why do people buy commodities?Portfolio volatility might be reduced by commodities. The historical correlation of commodities to traditional assets is low because factors like weather, politics or global production can influence commodity returns. Consequently, the returns from commodities could aid in lowering portfolio volatility.
A commodity market entails the purchase, sale, or trading of raw goods like coffee, gold, or oil. Soft commodities, such as livestock or agricultural products, contrast with hard commodities, which are typically natural resources.
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How would the federal reserve stimulate the united states economy and reduce unemployment?
To stimulate the economy and reduce unemployment, the Federal Reserve will lower the federal funds rate target.
The Federal Reserve could buy securities on the open market to stimulate the economy and reduce unemployment. The Federal Reserve employs expansionary monetary policy, which includes purchasing securities and lowering interest rates, to stimulate or expand the economy.
The Federal Reserve aims for a lower fed funds rate to encourage borrowing. Both of these actions stimulate the economy.
The Federal Reserve bases the funds rate on the interest rate on excess reserves. The federal funds rate is the interest rate at which banks lend to each other.
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How would you estimate the revenue that camp nou stadium in barcelona generates per year?.
Answer:
Camp Nou has been the soccer team's home since its completion in 1957, seating 99,354 fans. According to the club's website, Espai Barca will generate $207 million (€200 million) annually through sponsorship, title rights, VIP boxes, premium hospitality services, event space and the club's updated museum.Explanation:
this question relates to the td ameritrade video you watched for this lesson. finally, employees from local td ameritrade offices reached out to top customers in each local market to encourage them to participate. this represents which promotional tool? group of answer choices personal selling sales promotion public relations advertising
This represents personal selling as the tool of promotion in the specific scenario. (Option A)
What is meant by promotional tools?Promotional tools are techniques, approaches, or resources that persuade customers to purchase a good or service. They are frequently used by marketing and advertising experts to increase interest in a new product or boost sales of a specific good or service.
How would you define personal selling?Personal selling, sometimes referred to as face-to-face selling, is a sales technique where the consumer is persuaded to purchase a product by the salesperson alone. Through this type of promotion, the salesperson tries to close a deal by applying his or her knowledge and skills.
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The complete question is:
This question relates to the td ameritrade video you watched for this lesson. finally, employees from local td ameritrade offices reached out to top customers in each local market to encourage them to participate. this represents which promotional tool? group of answer choices
(A) personal selling
(B) sales promotion
(C) public relations
(D)advertising
the financial firms of the shadow banking system were a. less vulnerable than commercial banks to bank runs because they were less leveraged than commercial banks. b. less vulnerable than commercial banks to bank runs because they were not controlled by the federal reserve. c. more vulnerable than commercial banks to bank runs because they were more highly leveraged than commercial banks. d. less vulnerable than commercial banks to bank runs because they were selling risky investments such as mortgage backed securities.
The financial institutions of the shadow banking system are less susceptible to bank runs than commercial banks since they were independent of the federal reserve.
What exactly does the Reserve Bank do?To guarantee that the financial system supports a strong economy for American people, communities, and businesses, the Federal Reserve analyzes financial sector risks and actively participates at home and abroad.
What is Federal Reserve a bank or not?It is believed that the Fed Reserve System functions as a separate central bank. But only in the extent that the President and any other executive branch official is not required to ratify its decisions the executive branch.
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the uniform securities act specifically exempts certain issues from the registration and advertising filing requirements of the act. which of the following securities does not carry that exemption? a) 6-month commercial paper b) tax-free municipal bond c) canadian government bond d) bank holding company stock
Option d is correct. The securities that does not carry that exemption is bank holding company stock.
Certain subjects are expressly exempted under the unified securities act from the act's registration and advertising filing requirements. Stock of bank holding companies is the asset for which that exemption is not applicable. The SEC considers certain securities and transactions to be exempt from registration requirements. Government securities, bank securities, high-quality debt instruments, non-profit securities, and insurance contracts are typical examples of exempt securities.
Even if the bonds are an exempt security, the sale to an individual client is not an exempt transaction. Unsolicited transactions, sales to institutions, and sales by fiduciaries are all exempt.
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jane and don own a ski chalet in lake tahoe, nv and rented it for 12 days for $8,000. the rest of the year, the chalet was used by them and their friends and family. what is the proper tax treatment of the $8,000?
There will be no treatment as rental income is not included in gross income
Rental income is typically included in gross income for tax reasons. If a property is rented out for more than 14 days a year, the rental income is regarded as taxable. The rental revenue is not regarded as taxable if the property is rented out for less than 14 days per year. This is referred to as the 14-day rule, created to protect people who sometimes rent out their property from having to record the rental revenue on their tax return.
However, if a person is only renting out a house for a short time, like 12 days, there are a few exceptions to this regulation that can apply. Since Jane and Don only rented the ski chalet for 12 days, then they do not need to include it in his gross income.
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jamal works for a chemical company that manufactures pesticides and insecticides. the department he oversees deals especially with flea bombs and other products designed to take care of flea infestations. if jamal were to look back over his record of sales during the year, in which season would his department show the most growth? a. early winter b. spring c. late summer d. fall
Answer:
late summer
Explanation:
I just took the test and it was the correct answer.
What are 4 factors that affect stock prices?
If it looks like the economy is going to expand, stock prices may rise. Investors may buy more stocks thinking they will see future profits and higher stock prices. If the economic outlook is uncertain, investors may reduce their buying or start selling.
It is within the Bank of Canada's power to change interest rates in an effort to stabilize or strengthen the domestic economy. It is known as monetary policy. In the event that a business borrows money to expand and enhance operations, higher interest rates will raise the cost of its debt. The company's earnings and dividend payments to shareholders may be impacted by this. Consequently, its stock price could drop. Additionally, during times of rising interest rates, investors frequently find interest-bearing investments more alluring than stocks. If it looks like the economy will expand, stock prices can rise. The expectation of future gains and higher stock prices may lead investors to buy additional stocks. If the economic climate worsens, investors may begin to sell or reduce their buying.
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what effect does increasing competition have on price for firms with market power? it pushes the price up above marginal revenue. it inspires product differentiation and higher prices. price enters a cycle of ups and downs. it drives the price down to the level of costs.
The effect of increasing competition on price for firms with market power is option d, it drives the price down to the level of costs.
Market power refers to a firm's ability to control price change by manipulating the supply and demand of the product in the market. If a firm has market power, it can increase its profitability and create obstacles for its new competitors. These firms are also called price makers as they can manipulate the price of the product without compromising their market share.
The effects of increasing competition on price lead to lower prices of the products and increased quality to win the customer's trust. If the firms with market power face increasing competition on the price of the products, it would bring down the price in comparison to competitors.
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