Which of the Following Is Likely to Take Place If

question 5

Multiple Choice

Which of the following is likely to take place if regulators split a natural monopoly into two smaller firms?

• A) The number of firms in the market will increase but the market price will be unchanged.
• B) The output in the industry will increase.
• C) The cost of production in the industry will increase.
• D) The market demand curve will become flatter.
• E) The total industry profits will increase.

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Definitions:

Closing Entries

Journal entries made at the end of an accounting period to transfer the balances of temporary accounts to permanent accounts, thereby preparing the accounts for the next accounting period.

Correcting Entry

A journal entry made in the accounting records to amend an error or oversight in previously recorded transactions.

Accounts Payable

Financial obligations a company has to its suppliers, recorded as liabilities on the business’s financial statement.

Cash

A form of currency that represents immediate purchasing power and liquidity.