On July 1, 2019, Cullumber Company pays $12,000 to Kalter Insurance Co. for a 3-year insurance contract. Both companies have fis
cal years ending December 31. For Cullumber Company, journalize and post the entry on July 1 and the annual adjusting entry on December 31. For Blossom Company, journalize and post the entry on July 1 and the annual adjusting entry on December 31.
d. a monopoly firm reducing its price in an attempt to maintain its monopoly.
Explanation:
In a competitive system, a firm practices predatory pricing when it charges prices below its costs in order to eliminate competitors. When the prevailing system is a monopoly, the firm is the only company providing the good and it can practice predatory pricing in the short term to prevent a competitor from entering the market. Thus the firm remains monopolistic.
The Direct cost are those which are directly attributable to the product or service under consideration. Indirect cost are those which cannot be directly assigned to product or service cost. All the direct cost is added to the work in process account and indirect cost are included in the manufacturing overhead account.
Explanation: Asymmetric information is the term that is used to refer to a situation in which on part to an economic transaction has less information than the other party. This term is also known as information failure.
