In the Long Run, New Firms Will Enter a Monopolistic

question 111

Multiple Choice

In the long run, new firms will enter a monopolistic competitive industry until

• A)minimum average total cost is achieved.
• B)all firms are incurring losses.
• C)economic profits in the industry are zero.
• D)a and b

Calculate cash flows from operating activities using the indirect method.

Recognize the treatment of losses and gains from the sale of assets in the statement of cash flows.

Understand the indirect and direct methods for preparing the statement of cash flows.

Identify and categorize cash flow activities into operating, investing, and financing activities.

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Definitions:

Times Interest Earned Ratio

A financial metric that measures a company's ability to pay its interest expenses on outstanding debt with its earnings before interest and taxes.

Return On Total Assets

A financial ratio indicating the profitability of a company relative to its total assets, measuring how efficiently a company uses its assets to generate profit.

Year 2

Typically refers to the second year in a given context, such as the second year of a business, investment, or educational program.

Gross Margin Percentage

A financial metric that measures the difference between revenue and cost of goods sold as a percentage of revenue.