The Diagram Below Shows Selected Cost and Revenue Curves for a Firm

question 112

Multiple Choice

The diagram below shows selected cost and revenue curves for a firm in a monopolistically competitive industry.
FIGURE 11- 1
-An imperfectly competitive industry is often allocatively inefficient when compared to the performance of a competitive industry,because imperfect competitors

• A)make profits.
• B)operate in the global economy.
• C)set price above the marginal cost.
• D)obtain economies of scale.
• E)maximize profits.

---

Definitions:

Machine-Hours

A measure of the total time that machines are operating in a manufacturing process.

Predetermined Overhead Rate

The predetermined overhead rate is calculated by dividing estimated overhead costs by an allocation base, such as direct labor hours, to allocate overhead costs to products or services.

Manufacturing Overhead

All indirect costs related to the production process, such as the costs of maintenance, supplies, and utilities, excluding direct materials and direct labor.

Direct Labor-Hour

A measure of labor productivity that indicates the amount of labor input in terms of hours for producing one unit of output.