Use the Table for the Question(s)below

question 15

Multiple Choice

Use the table for the question(s) below.
Statement of Financial Position

-If the above statement of financial position is for a retail company,how has the company's leverage changed between 2014 and 2015?

• A)The company has experienced a very significant decrease in its leverage.
• B)The company has experienced a significant decrease in its leverage.
• C)The company has experienced no significant change in its leverage.
• D)The company has experienced a significant increase in its leverage.
• E)The company has experienced a slight decrease in its leverage.

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Definitions:

Long-Run Profits

Earnings that a firm expects to generate over an extended period, taking into account all variable and fixed costs.

Excess Capacity

The situation where a firm produces less than its total output capacity, often due to lack of demand.

Monopolistically Competitive

A market structure where many firms sell products that are similar but not identical, allowing for some degree of market power and price setting.

Long-Run Equilibrium

A state in which all inputs can be adjusted by firms, market supply equals demand, and there is no incentive for economic actors to alter their behavior.