Crossroads Corporation Distributes $60,000 to Its Sole Shareholder Harley

question 65

Multiple Choice

Crossroads Corporation distributes $60,000 to its sole shareholder Harley. Crossroads has earnings and profits of $55,000 and Harley's basis in her stock is $20,000. After the distribution, Harley's basis is

• A)$5,000.
• B)$15,000.
• C)$20,000.
• D)$60,000.

Analyze how monopolists adjust output and pricing in response to marginal costs and marginal revenue.

Understand the role of barriers to entry in maintaining long-term monopoly profits.

Comprehend the concepts of profit maximization and loss minimization for monopolists in both the short run and the long run.

Describe the economic effects of monopolies on efficiency and market outcomes.

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