Explain the process by which prices of securities adjust so as to eliminate arbitrage profits
What will be an ideal response?
In competing to buy securities where earning arbitrage profits is possible, traders force prices up to the level where arbitrage profits can no longer be earned.
Economics
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Which of the following conditions indicate cost minimization, assuming two inputs, labour (L) and capital (K)?
a) MPL = MPK b) MPK/PL = MPL/PK c) PK · MPK = PL · MPL d) PK = PL e) MPK/PK= MPL/PL
Economics
The profit-maximizing firm should lay off workers when: a. MRC < MRP
b. MRC > MRP. c. MRC = MRP. d. the MP of labor begins to diminish.
Economics