In a Perfectly Competitive Market, Smaller- Than- Efficient Sized Firms

question 32

Multiple Choice

In a perfectly competitive market, smaller- than- efficient sized firms can exist in

• A) both the short run and the long run, but they must reduce plant size to remain competitive.
• B) both the short and long run.
• C) the long run, and they will make positive economic profits.
• D) the short run.
• E) the long run.

---

Definitions:

Journal Entry

A record in the accounting journal that represents a business transaction and its effect on the accounts.

Manufacturing Overhead

All indirect costs associated with the production process, from maintenance expenses of the production facility to the supplies needed for operation.

Work in Process

Goods that are midway through the manufacturing process but are not fully finished.

Journal Entry

A record in accounting that represents a transaction, consisting of debits and credits, in the financial books.