A Natural Monopoly Is Most Likely to Occur in Which

question 42

Multiple Choice

A natural monopoly is most likely to occur in which of the following industries?

• A)the pharmaceutical industry because the development and approval of new drugs through the Food and Drug Administration can take more than 10 years
• B)the diamond mining and marketing industry because one firm can control a key resource
• C)the software industry because of the importance of network externalities
• D)an industry where fixed costs are very large relative to variable costs

Recognize the factors involved in the formation and operation of a partnership.

Understand the accounting and financial implications of changes in partnership composition.

Understand the process and implications of admitting new partners into a partnership, including asset investment and premium payments.

Comprehend the methods for dividing income and losses among partners, especially in scenarios where net income is less than expected allowances.

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Definitions:

Rising

Describes an increase or upward movement in metrics such as price, quantity, or value.

Base Year

A reference year used for comparative purposes in the calculation of indexes, such as the Consumer Price Index, to measure changes over time.

Consumer Price Index

A measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care, used to measure inflation or deflation.

First Year

The initial period or starting phase of an entity, event, or process, often marking the beginning of measurement or assessment.