Conditions Which May Prevent New Firms from Entering an Industry

question 14

Multiple Choice

Conditions which may prevent new firms from entering an industry (i.e. ,the use of patents) are referred to as

• A)barriers to entry.
• B)roadblocks.
• C)unfair trade practices.
• D)insider trading.
• E)trade protectionism.

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Definitions:

Act of Nature

Natural events outside of human control, such as earthquakes, floods, or hurricanes, that can cause damage or affect contracts and liabilities.

Fair Value

An estimate of the market value of an asset or liability, based on current prices in an orderly transaction between market participants.

Book Value

Book value is the value of an asset according to its balance sheet account balance, taking into account the cost of the asset minus any depreciation, amortization, or impairment costs.

Loss on Disposal

An expense recorded when an asset is sold for less than its carrying amount on the balance sheet.