Which of the Following Is Unlikely to Have a High

question 36

Multiple Choice

Which of the following is unlikely to have a high capital intensity ratio?

• A) railroad
• B) automobile manufacturer
• C) law firm
• D) shipbuilder

Comprehend the role of customer and trade discounts in merchandising transactions.

Realize the financial representation of sales tax in sales transactions.

Understand the terms of sale and their impact on freight charges and ownership of goods.

Recognize the differences in financial statement accounts between service and merchandising businesses.

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Definitions:

Perfect Competitor

An entity in a highly competitive market where firms sell homogeneous products, have no control over market price, and where there is free entry and exit of firms.

Elastic Demand Curve

Represents a situation where the quantity demanded of a good or service significantly changes in response to a change in price.

Demand Curve

A graph showing the relationship between the price of a good and the quantity of that good that consumers are willing to purchase at various prices.

Monopolistic Competitor

A market structure where many firms sell products that are similar but not identical, thereby having some control over their prices.