If a Firm Was Able to Acquire Control Over Access

question 141

Multiple Choice

If a firm was able to acquire control over access to bauxite, the ore used in aluminum manufacturing, it would gain monopoly control of the aluminum industry because that firm

• A)holds a patent.
• B)is given the right to control the market by government.
• C)controls an essential input.
• D)is a natural monopoly.

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Definitions:

Return On Common Equity

Return on Common Equity (ROCE) measures the return a company generates on the common equity held by its shareholders, indicating how effectively equity is used to generate profits.

Net Income

A company's overall earnings minus all expenditures and tax obligations.

Preferred Stock

A class of ownership in a corporation with a fixed dividend that is paid before any dividends are paid to common stockholders. Preferred stock typically does not have voting rights.

Return On Assets Ratio

A profitability ratio that measures how efficiently a company can manage its assets to produce net income, calculated by dividing net income by total assets.