A Characteristic of a Competitive Free Market Is That, If

question 64

Multiple Choice

A characteristic of a competitive free market is that, if external costs exist, they:

• A) enable the market to allocate resources efficiently.
• B) are reflected by the total market supply curve.
• C) are not reflected by the total market supply curve.
• D) are reflected by the total market demand curve.

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Definitions:

Accounts Receivable Subsidiary Ledger

A detailed ledger that contains individual customer accounts and tracks their transactions separate from the general ledger.

Revenue Ledger

A division of the general ledger where all income transactions of a business are recorded, including sales, interest, and dividends.

Subsidiary Ledger

A detailed ledger that provides a breakdown of information summarized in the general ledger, often for accounts like Accounts Receivable or Accounts Payable.

Sales Returns And Allowances

A reduction in sales revenue resulting from customers returning goods or receiving discounts for faulty or unsatisfactory products.