In a Monopolistically Competitive Market, If Price Is Greater Than

question 336

Multiple Choice

In a monopolistically competitive market, if price is greater than average cost

• A) firms will enter.
• B) firms will exit.
• C) there will be no change in the number of firms.
• D) the market is in long-run equilibrium.

Comprehend the principles guiding revenue and expense recognition.

Discern between different accounting methodologies (accrual vs. cash basis) and their acceptance under GAAP.

Clarify the role and types of contra asset accounts.

Understand the necessity of periodic financial statements and the adjustments required for their preparation.

---

Definitions:

Time Clocks

Devices used by employers to record the number of hours worked by employees, ensuring accurate tracking of time for payroll purposes.

Incentive Conflict

A situation where parties have different, competing goals. In agency relationships, the different goals of principals and agents is an example of incentive conflict.

Agent

A person who acts on behalf of another individual (a principal). Principal–agent problems are created by the incentive conflict between principals and agents.

Principal

An individual who hires another (an agent) to act on his or her behalf.