As the Price of a Good Rises

question 6

Multiple Choice

As the price of a good rises:

• A)firms earn larger profits.
• B)more firms can cover their opportunity costs of producing the good.
• C)firms find they can raise price by even more.
• D)government regulation becomes more justified.

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Definitions:

Fees Earned

Income or revenue generated through providing services.

Creditor's Account

An account maintained to record transactions involving credit purchases or loans received, indicating the amount owed to suppliers or lenders.

General Journal

A fundamental bookkeeping document designed to systematically record every business transaction by date.

Revenue Journal

A specialized accounting journal used to record all the revenue transactions of a business, ensuring they are accounted for in the period they are earned.