Canton Graphics Issues a $13,000, 7

question 38

Multiple Choice

Canton Graphics issues a $13,000, 7.5%, 2-year note to Bowden Corporation. Interest on the note is _________ and the maturity value is __________.

• A) $1,950; $14,950
• B) $1,950; $13,000
• C) $14,950; $1,950
• D) $13,000; $1,950

---

Definitions:

Homogeneous Product

A homogeneous product is one that is perceived by consumers as identical in quality and function to a product from another producer.

Entry Barriers

Entry Barriers are obstacles that make it difficult for new entrants to enter an industry, protecting existing firms from competition.

Oligopoly

An oligopoly is a market structure dominated by a few large firms, leading to limited competition and possibly collaborative behavior to control prices and market share.

Increasing Returns To Scale

Long-run average total cost declines as output increases (also referred to as economies of scale).