If All Firms in an Industry Are Price Takers

question 27

Multiple Choice

If all firms in an industry are price takers:

• A)each firm can sell at the price it wants to charge,provided it is not too different from the prices other firms are charging.
• B)each firm takes the market price as given for its output level,recognizing that the price will change if it alters its output significantly.
• C)an individual firm cannot alter the market price even if it doubles its output.
• D)the market sets the price,and each firm can take it or leave it by setting a different price.

Identify the most profitable divisions using various profitability metrics.

Compute minimum acceptable return on investment.

Understand and apply the concepts of controllable revenues, operating income, and calculation of ROI and its components.

Understand the purpose and importance of budget performance reports in cost management.

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Definitions:

Supply Chain Surplus

The difference between the value generated by the supply chain's final product to the end customer and the costs of the supply chain.

Consumer Surplus

The difference between the total amount consumers are willing to pay for a good or service and the total amount they actually pay.

Cerebral Cortex

The outer layer of the brain, responsible for complex functions including thought, memory, and voluntary movement.

Motor Speech

The process that involves the planning and execution of movements required for the production of speech.