Excess Capacity Is a Problem in Monopolistic Competition Because,if There

question 226

Multiple Choice

Excess capacity is a problem in monopolistic competition because,if there were fewer firms in the industry:

• A)there would be more choices for consumers.
• B)average total costs would be higher and profits would be lower.
• C)average total costs would be lower and the prices paid by consumers could be lower.
• D)there would be less need for government regulation.

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Definitions:

Net Realizable Value

The estimated selling price of goods minus the cost of their sale or completion.

Allowance for Doubtful Accounts

An accounting provision made by a company to account for customers who may not be able to make required payments, affecting the accounts receivable balance.

Accounts Receivable

Money owed to a company by its customers for products or services that have been delivered but not yet paid for.

Adjusting Entry

An accounting journal entry made at the end of a period to record any unrecognized income or expenses for that period, ensuring accuracy of the financial statements.