Which of the Following Statements Correctly Identifies a Similarity Between

question 181

Multiple Choice

Which of the following statements correctly identifies a similarity between network effects and economies of scale?

• A) Both are related to the costs incurred by a firm.
• B) Both act as barriers to entry in a market.
• C) Both act as disincentives to monopolies.
• D) Both are related to the number of consumers using a firm's product.

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Definitions:

Mutual Agency

A legal principle in partnership businesses where each partner is authorized to act on behalf of the partnership and bind it in contracts.

Authorized Capital Stock

As stated in its charter, the number of shares of capital stock (common and preferred) that a corporation can sell.

Issued Capital Stock

Stock that the corporation issues for assets or services contributed by the stockholders.

Mutual Agency

A principle in partnership where each partner is fully authorized to act on behalf of the partnership, making decisions that bind all parties.