The Figure Given Below Shows the Revenue and Cost Curves

question 62

Multiple Choice

The figure given below shows the revenue and cost curves of a firm. MC represents the marginal cost curve, AC the average cost curve, MR the marginal revenue curve, and AR the average revenue curve.Figure 9.4

-If barriers to entry exist in the market for a product, then:

• A)the costs of entry and exit are relatively low.
• B)there will be few close substitutes of the product in the market.
• C)firms will be incurring losses in both the short run and the long run.
• D)firms will tend to have relatively less monopoly power.
• E)the existing firms will quit the market in the long run due to mounting losses.

Define and understand the precautionary principle and its significance in environmental policy.

Understand the concept and reporting of allowance for doubtful accounts as a contra-asset.

Comprehend the impact of sales discounts, returns, and allowances on financial statements.

Interpret and calculate the effects of credit terms on financial decisions.

---

Definitions:

Book Value

The net value of a company's assets found on its balance sheet, and calculated as total assets minus intangible assets (patents, goodwill) and liabilities.

Market Value

The current price at which an asset or service can be bought or sold in the market.

Total Assets

Represents the sum of all funds, properties, and assets owned by a company or individual at a given time.

Defensive Mergers

Mergers undertaken by companies to protect against potential threats, improve market position, or mitigate weaknesses.