Suppose That, in the Long Run, the Price of Feature

question 67

Multiple Choice

Suppose that, in the long run, the price of feature films rises as the movie production industry expands. We can conclude that movie production is a(n) :

• A) increasing-cost industry.
• B) constant-cost industry.
• C) decreasing-cost industry.
• D) marginal-cost industry.

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Definitions:

Replacement Period

The timeframe during which property must be replaced to defer recognition of gains for tax purposes under certain conditions.

Tax Due

The amount of tax liability one owes to a tax authority after all calculations are completed.

Wash Sale Rules

IRS regulations that disallow the claim of a loss on the sale of a security if a substantially identical security is purchased within a 30-day period before or after the sale.

Securities

Financial instruments that represent an ownership position in a publicly-traded corporation (stock), a creditor relationship with a governmental body or a corporation (bond), or rights to ownership as represented by an option.