Figure 13-7 Figure 13-7

question 93

Multiple Choice

Figure 13-7 Figure 13-7
shows short-run cost and demand curves for a monopolistically competitive firm in the market for designer watches.
-Refer to Figure 13-7.If the diagram represents a typical firm in the designer watch market,what is likely to happen in the long run?

• A) Some firms will exit the market causing the demand to increase for firms remaining in the market.
• B) The firms that are making losses will be purchased by their more successful rivals.
• C) Inefficient firms will exit the market and new cost efficient firms will enter the market.
• D) Firms will have to raise their prices to cover costs of production.

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Definitions:

Rent Revenue

Income earned from leasing out property or space to tenants.

Year-End Closing Process

The series of steps taken by businesses at the end of an accounting year to close out books, including reconciling accounts and preparing financial statements.

End-Of-Period Spreadsheet

A tool used in accounting to gather all the balances of ledger accounts to calculate adjustments and prepare financial statements at the end of an accounting period.

Closing Entry

A journal entry made at the end of an accounting period to transfer balances from temporary accounts to permanent accounts, essentially resetting the temporary accounts for the new period.