Scenario 14-2 Consider a Local,privately-Owned Electrical Cooperative Named Minny County Megawatts (MCM,LLC).MCM

question 380

Multiple Choice

Scenario 14-2
Consider a local,privately-owned electrical cooperative named Minny County Megawatts (MCM,LLC) .MCM has just completed a natural-gas-burning electrical power plant in the Midwest.Currently,MCM can meet the electricity needs of all residents in the county.In fact,its capacity far exceeds the needs of the county.After just a few years of operation,the shareholders of MCM experienced incredible rates of return on their investment due to the profitability of the corporation.
-Refer to Scenario 14-2.MCM will continue to be a monopolist in the electricity industry only if

• A) population growth leads to an increased demand for electricity.
• B) there are no new entrants to the market.
• C) the price of natural gas decreases.
• D) All of the above are correct.

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Definitions:

Period Costs

Costs that are expensed in the period they are incurred, not directly tied to the production of goods, such as selling, general, and administrative expenses.

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The process of disclosing financial data and information about a company's performance, financial position, and cash flows, typically in the form of financial statements.

Direct Materials

Components that are directly associated with the creation of a specific product.

Direct Labor

The labor costs directly attributable to the production of goods or services, which includes wages paid to workers who physically produce the product.