Excess Capacity in Monopolistically Competitive Firms Occurs Because

question 65

Multiple Choice

Excess capacity in monopolistically competitive firms occurs because

• A)each firm faces a demand that is perfectly elastic.
• B)each firm builds a huge plant.
• C)the existence of slightly differentiated products,serving almost the same purpose,causes a waste of precious natural resources.
• D)firms produce an output that is less than the output at minimum average total cost.
• E)marginal cost is too high.

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Definitions:

General Ledger Accounts

These are the main accounts where all the business transactions of a company are recorded, serving as a permanent record organized by account.

Trial Balance

A financial worksheet that gathers the balances from all accounts into debit and credit columns, verifying the mathematical accuracy of a company's accounting system.

Recording Process

The method of capturing and documenting financial transactions in the accounting records.

Journalizing

The process of recording business transactions in the journal or books of original entry in accounting.