In the Theory of Perfect Competition

question 173

Multiple Choice

In the theory of perfect competition,

• A)sellers of the product are not influenced by other sellers and therefore have virtually complete control over the production and pricing of their product.
• B)buyers of the product may have a preference as to whom they purchase from based on brand loyalty.
• C)buyers and sellers of the product know everything that there is to know about the product.
• D)it can be quite expensive for a firm to enter this type of market, but once the firm is established, it will be a profitable venture.

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Definitions:

Ending Inventory

The sum value of inventory available for purchase at the end of an economic period.

Beginning Inventory

The value of all the goods available for sale at the start of an accounting period; essentially the remaining inventory from the previous period.

Internal Controls

Procedures and mechanisms implemented by a company to ensure integrity in financial reporting, compliance with laws and regulations, and effective and efficient operations.

Physical Count

The process of manually counting actual inventory or assets in person, often for verification purposes against accounting records.