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Tags
#cfa-level-1 #microeconomics #reading-16-the-firm-and-market-structures #study-session-4
Question

In less competitive markets, [...] even in the long run; in the short run, any outcome is possible.

Answer
large profits are possible

Tags
#cfa-level-1 #microeconomics #reading-16-the-firm-and-market-structures #study-session-4
Question

In less competitive markets, [...] even in the long run; in the short run, any outcome is possible.

Answer
?

Tags
#cfa-level-1 #microeconomics #reading-16-the-firm-and-market-structures #study-session-4
Question

In less competitive markets, [...] even in the long run; in the short run, any outcome is possible.

Answer
large profits are possible
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rm’s profitability will be determined by the forces associated with the market structure within which it operates. In a highly competitive market, long-run profits will be driven down by the forces of competition. In less competitive markets, <span>large profits are possible even in the long run; in the short run, any outcome is possible. Therefore, understanding the forces behind the market structure will aid the financial analyst in determining firms’ sho

Original toplevel document

1. INTRODUCTION
The purpose of this reading is to build an understanding of the importance of market structure. As different market structures result in different sets of choices facing a firm’s decision makers, an understanding of market structure is a powerful tool in analyzing issues such as a firm’s pricing of its products and, more broadly, its potential to increase profitability. In the long run, a firm’s profitability will be determined by the forces associated with the market structure within which it operates. In a highly competitive market, long-run profits will be driven down by the forces of competition. In less competitive markets, large profits are possible even in the long run; in the short run, any outcome is possible. Therefore, understanding the forces behind the market structure will aid the financial analyst in determining firms’ short- and long-term prospects. Section 2 introduces the analysis of market structures. The section addresses questions such as: What determines the degree of competition associated with each market struc

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