Which of the Following Is a Characteristic of a Contestable

question 34

Multiple Choice

Which of the following is a characteristic of a contestable market?

• A) long-run economic profit
• B) many firms that are small relative to the market
• C) high costs for entry and exit
• D) minimum-cost production methods

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Definitions:

Fixed Expense

Fixed expense refers to costs that do not fluctuate with the level of goods or services produced by the business, such as rent, salaries, and insurance.

Borrowing Risk

The potential danger that borrowers might not be able to repay their loans or meet other financial obligations, leading to financial loss for the lender.

Accrued Interest

Interest that has been incurred but not yet paid at the end of a period.

Adjusting Entry

An accounting record made to update the financial statements to reflect transactions that have occurred but are not yet recorded.