Asked by Patel Fenil on Jun 14, 2024
Verified
A market in which profit opportunities are eliminated almost instantaneously is
A) a laissez-faire market.
B) a capitalist market.
C) a socialist market.
D) an efficient market.
Efficient Market
A market in which all available information is fully and immediately reflected in stock prices, making it impossible to achieve consistently higher returns.
Profit Opportunities
Situations where businesses can earn additional profits due to market conditions, innovations, or identifying unmet needs.
Laissez-faire Market
An economic model where exchanges between individuals or businesses are not subject to governmental regulations, preferential treatments, duties, or financial support.
- Identify the fundamental principles of economics, including opportunity cost, the margin principle, and the efficacy of markets.
Verified Answer
HD
Hajar DarwishJun 18, 2024
Final Answer :
D
Explanation :
An efficient market is characterized by the rapid assimilation of information into asset prices, meaning that profit opportunities are quickly identified and exploited, leaving no room for abnormal or excess profits. This is the essence of the Efficient Market Hypothesis.
Learning Objectives
- Identify the fundamental principles of economics, including opportunity cost, the margin principle, and the efficacy of markets.