An Asset Was Purchased for $120,000 on January 1, Year

question 222

Multiple Choice

An asset was purchased for $120,000 on January 1, Year 1 and originally estimated to have a useful life of 10 years with a residual value of $10,000. At the beginning of the third year, it was determined that the remaining useful life of the asset was only four years with a residual value of $2,000. Calculate the third-year depreciation expense using the revised amounts and straight-line method.

• A) $25,000
• B) $11,000
• C) $24,000
• D) $24,500

Describe the conditions for effective price discrimination in monopoly.

Understand the relationship between demand elasticity and monopolist's pricing decisions.

Recognize the implications of patents and monopolistic barriers to entry on firm behavior and market structure.

Assess the role of natural monopoly attitudes towards pricing policies and their impact on economic profits.