Ralph Gives His Daughter, Angela, Stock (Basis of $8,000; Fair

question 99

Multiple Choice

Ralph gives his daughter, Angela, stock (basis of $8,000; fair market value of $6,000) .No gift tax results.If Angela subsequently sells the stock for $10,000, what is her recognized gain or loss?

• A)$0
• B)$2,000
• C)$4,000
• D)$10,000

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Definitions:

Economies Of Scale

The cost advantage that arises with increased output of a product, as fixed costs are spread over more units of production, reducing the cost per unit.

Diseconomies Of Scale

An increase in average total cost as output rises.

Monopoly

A market structure characterized by a single seller who has exclusive control over a product or service, with no close substitutes.

Natural Monopoly

A market situation where the most cost-efficient production level is achieved by a single firm due to high fixed or start-up costs, making it impractical for new entrants.