One of the Practical Difficulties in Regulating a Natural Monopoly

question 59

Multiple Choice

One of the practical difficulties in regulating a natural monopoly using average-cost pricing is:

• A)that the average-cost pricing rule leads to losses which must be subsidized.
• B)that the price ceiling from average-cost pricing is likely to result in shortages.
• C)that the monopoly has no incentive to minimize costs.
• D)it will result in a surplus in the market leading to a drastic fall in the price.

Differentiate between various adjustments and their implications for financial statements.

Comprehend the role of the double-entry system in maintaining the accounting equation's balance.

Understand how transactions are recorded in journals and ledgers, and the importance of consistency in account titles.

Distinguish between the process of journalizing and posting.

---

Definitions:

Eroded Away

The process by which natural forces remove and transport soil, rock, or other material from one location to another.

Geologic Timescale

A system of chronological dating that relates geological strata to time, used by geologists to describe the timing and relationships of events in Earth's history.

Cenozoic

The current geological era, beginning about 66 million years ago, characterized by the significant development of mammals and birds following the extinction of dinosaurs.

Environmental Change

The alteration of the environment due to natural processes or human activities.