Which of the Following Statements About Price and Marginal Cost

question 28

Multiple Choice

Which of the following statements about price and marginal cost in competitive and monopolized markets is true?

• A) In competitive markets, price equals marginal cost; in monopolized markets, price exceeds marginal cost.
• B) In competitive markets, price equals marginal cost; in monopolized markets, price equals marginal cost.
• C) In competitive markets, price exceeds marginal cost; in monopolized markets, price exceeds marginal cost.
• D) In competitive markets, price exceeds marginal cost; in monopolized markets, price equals marginal cost.

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Definitions:

Liabilities

Economic obligations of the company, such as money owed to lenders, suppliers, and employees.

Days Sales Outstanding (DSO)

A financial measure that indicates the average number of days it takes a company to collect payment after a sale has been made.

Goodwill

An intangible asset that arises when a business is acquired for more than the fair value of its net identifiable assets, often attributed to brand reputation, customer relationships, and intellectual property.

Book Value

The value of a company or asset according to its financial statements, calculated as total assets minus intangible assets (patents, copyrights) and liabilities.