When There Are External Economies of Scale,an Increase in the Size

question 27

Multiple Choice

When there are external economies of scale,an increase in the size of the market will

• A) increase the number of firms and lower the price per unit.
• B) increase the number of firms and raise the price per unit.
• C) decrease the number of firms and raise the price per unit.
• D) decrease the number of firms and lower the price per unit.
• E) not affect the number of firms, but will lower the price per unit.

Grasp the concept and recording implications of warranty expenses and associated journal entries.

Comprehend sales revenue recognition and the impact of collecting sales taxes on financial reporting.

Recognize the accounting treatment for subscriptions and the revenue recognition principle.

Understand the categorization and implications of employer payroll taxes and liabilities.

---

Definitions:

Federal Taxes

Taxes imposed by the federal government on income, sales, imports, and other activities.

Social Security Taxes

Compulsory payments made by employers and employees to fund the Social Security program, which provides retirement, disability, and survivorship benefits.

FUTA Tax Rate

The percentage rate at which employers are taxed under the Federal Unemployment Tax Act, funding state workforce agencies.

SUTA Tax Rate

The state unemployment tax rate businesses must pay, varying by state and affecting employer contributions to state unemployment funds.