Which One of the Following Is the Most Accurate Description

question 56

Multiple Choice

Which one of the following is the most accurate description of a monopolist?

• A) a sole producer of a narrowly defined product class, such as brown, Grade A eggs produced in Eagle County, Colorado
• B) a firm that is very large relative to all its competitors within a narrow product class
• C) a sole producer of a product for which good substitutes are lacking in a market with high barriers to entry
• D) a large, multinational firm that produces a single product in a narrow product class

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Definitions:

Interest Tax Shield

The tax savings achieved by deducting payable interest on debt from taxable income, thereby reducing the overall tax expense.

Deductibility

Deductibility refers to the eligibility of an expense to be subtracted from gross income to reduce taxable income, under tax regulations.