Which of the Following Market Structures Describes an Industry in Which

question 91

Multiple Choice

Which of the following market structures describes an industry in which all firms produce differentiated output and there are few barriers to entry?

• A) perfect competition
• B) monopoly
• C) oligopoly
• D) a cartel
• E) monopolistic competition

---

Definitions:

Variable Costing

A managerial accounting method that includes only variable production costs (materials, labor, and overhead) in product costs, treating fixed manufacturing overhead as an expense of the period.

Absorption Costing

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

Net Income

The total profit of a company after all expenses and taxes have been deducted from total revenues.

Operating Leverage

A measure of how revenue growth translates into growth in operating income, highlighting the fixed versus variable costs structure of a business.