An Industry Is Characterized by Scale Economies and Exists in Two

question 33

Multiple Choice

An industry is characterized by scale economies and exists in two countries. In order for consumers of its products to enjoy both lower prices and more variety of choice

• A) the two countries must engage in international trade with each other.
• B) each country's marginal cost must equal that of the other country.
• C) the monopoly must lower prices in order to sell more.
• D) they must combine to become a multinational corporation.
• E) the marginal cost of this industry must equal marginal revenue in the other.

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Definitions:

Estimated Total Manufacturing Overhead

The anticipated total costs associated with the indirect expenses of producing goods, such as utilities and rent for the manufacturing facility.

Job-Order Costing System

An accounting method that assigns costs to specific production jobs or batches and is used when the products produced are sufficiently distinct from each other.

Predetermined Overhead Rate

A rate calculated before the fiscal year begins, used to estimate the manufacturing overhead for each unit of production.

Machine-Hours

A measure of production output or activity based on the number of hours machinery is operated.