In an Industry with a Large Number of Firms

question 164

Multiple Choice

In an industry with a large number of firms,

• A) each firm will produce a large quantity, relative to market demand.
• B) one firm will dominate the market.
• C) collusion is impossible.
• D) competition is eliminated.
• E) barriers to exit must exist.

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Definitions:

Accrued Expense

An expense that has been incurred but not yet paid for.

Adjusting Entry

A journal entry made at the end of an accounting period to account for unrecorded transactions or to adjust incorrect entries.

Insurance

A contractual agreement that provides financial protection or reimbursement against losses to an individual or entity, in exchange for premiums paid.

Depreciation

The method of allocating the cost of a tangible or physical asset over its expected useful life to account for the decrease in its value over time.