If the Technology Associated with Producing Fiber-Optic Cable Continues to Advance,over

question 96

Multiple Choice

If the technology associated with producing fiber-optic cable continues to advance,over time the cost of producing fiber-optic cable will

• A) decrease, firms that use the new technology will make an economic profit, and in the long run new firms will enter the market.
• B) decrease, firms that use the new technology will incur an economic loss, and in the long run some firms will exit the industry.
• C) increase, firms that use the new technology will make an economic profit, and in the long run new firms will enter the market.
• D) increase, firms that use the new technology will incur an economic loss, and in the long run some firms will exit the industry.
• E) decrease, firms that do not use the new technology will make an economic profit, and in the long run new firms will enter the market.

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Definitions:

Joint Venture

A business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task.

Fair Value

The fund received from an asset sale or the cost for a liability shift in a smoothly facilitated transaction among participants of the market on the price determination date.

Capital Cost Allowance

A taxable expense in Canada that allows a business to deduct the cost of a capital asset over time.

Half-Year Rule

A tax rule in some jurisdictions that allows only half the usual depreciation expense deduction in the year that a capital asset is acquired.