An Industry Is Characterized by Scale Economies and Exists in Two

question 28

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 marginal cost of this industry must equal marginal revenue in the other.
• D) the monopoly must lower prices in order to sell more.
• E) they must combine to become a multinational corporation.

Distinguish between the different classifications of stock and stock transactions.

Explain the tax implications and disadvantages of the corporate structure.

Understand the concepts of paid-in capital and its sources.

Recognize the impact of cash dividends on corporate finance.

---

Definitions:

Preferences

Individual choices or inclinations towards certain products, services, or outcomes over others.

Location Subsidies

Financial incentives provided by governments to encourage businesses to set up or expand in particular areas, often to stimulate economic growth.

Public Good

A good or service offered to society's members at no cost, sponsored by either a private entity or the government with no intent of making a profit.

Marginal Cost

Marginal cost is the change in total production cost that comes from making or producing one additional unit of a good or service.