Assume a Firm Is a Monopoly and Enjoys $10,000,000 Profits

question 24

Multiple Choice

Assume a firm is a monopoly and enjoys $10,000,000 profits per year.The firm lobbies to have a moratorium passed by Congress on new firms in its market for the next 25 years.If there is no discount rate,how much would any firm(s) arguing against the moratorium be willing to spend to block it?

• A) something less than $250 million
• B) $250 million
• C) $251 million
• D) $250 billion

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Definitions:

General Ledger

The main accounting record of a company that uses double-entry bookkeeping, containing all the financial accounts and statements.

Subsidiary Ledger

A ledger containing detailed information for accounts in the general ledger, such as customers or inventory, facilitating more detailed tracking and management.

Accounts Receivable

Money owed to a company by its customers for goods or services delivered or used but not yet paid for.

Worksheet

An informal accounting document used inside an organization, facilitating the preparation of financial statements and supporting the adjustment process at the end of an accounting period.