One Possible Benefit of a Monopoly Is

question 7

Multiple Choice

One possible benefit of a monopoly is

• A)a more efficient allocation of resources; only one firm is needed to supply quantity demanded.
• B)greater opportunities for research due to long-run positive economic profits.
• C)the government is better able to ensure that it follows laws and guidelines because there is only one firm to monitor.
• D)goods and services are provided at a lower price than under perfect competition because of a monopoly's decreasing average cost curve.

Understand the concept of full depreciation and its implications for asset book value.

Recognize the relevance and application of the Modified Accelerated Cost Recovery System (MACRS) in depreciation.

Understand the considerations for selecting a depreciation method based on asset usage and financial reporting goals.

Identify the tax considerations and regulations related to depreciation, including MACRS guidelines.

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Definitions:

Variable Costing

A costing method where only variable costs are charged to product costs, with fixed costs treated as period costs.

Absorption Costing

A cost accounting method that includes all manufacturing costs (direct materials, direct labor, and both variable and fixed manufacturing overhead) in the cost of a product.

Profit

The financial gain achieved when the revenue from business activities exceeds the expenses, costs, and taxes involved in maintaining the operation.

Standard Costs

Predetermined costs for products or services, used as benchmarks for evaluating actual performance and cost control.