If Government Forced a Firm to Charge a Price Equal

question 67

Multiple Choice

If government forced a firm to charge a price equal to marginal cost in a situation where there are scale economies,

• A)new firms would enter the industry.
• B)the firm would be forced to go bankrupt.
• C)positive economic profit would grow even larger.
• D)marginal cost would exceed average cost.

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Definitions:

General Ledger

The primary accounting record of a company that contains all the account balances needed to prepare financial statements.

Accounts Payable

Liabilities owed by a business to its suppliers or vendors for goods and services received but not yet paid for.

General Ledger

A comprehensive set of accounts that records all financial transactions of a business, organized by account.

Subsidiary Ledger

A subsidiary ledger is a detailed ledger that contains account-specific information, supporting and connected to the general ledger for a comprehensive accounting system.