Which of the Following Are the Most Likely Characteristics of a Market

question 8

Multiple Choice

Which of the following are the most likely characteristics of a market which has a high degree of monopoly power? Please select all that apply.

• A) Prices will be high and allocative efficiency will not be evident
• B) Productive efficiency will not be attained
• C) The elasticity of demand for the product will be relatively inelastic
• D) There will be very large profits

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Definitions:

Consolidation Purposes

The process of combining the financial statements of a parent company and its subsidiaries into one comprehensive financial statement package, to present as if the group were a single entity.

Excess Amortizations

The amount by which amortization expense exceeds the amount necessary to amortize the cost of a tangible or intangible asset over its useful life.

Intra-Entity Asset Transfers

Transactions involving the transfer of assets or services between divisions or subsidiaries within the same entity, which may need to be adjusted for in consolidated financial reporting.

Depreciation Purposes

The allocation of the cost of an asset over its useful life for accounting and tax purposes.