Suppose the Technology of an Industry Is Such That the Typical

question 64

Multiple Choice

Suppose the technology of an industry is such that the typical firm's minimum efficient scale is 18 units per day at an average long- run cost of $1600 per unit. If the total quantity demanded at a price of $1750 per unit is 16 units per month, the likely result would be

• A) a cartel.
• B) a natural monopoly.
• C) price discrimination.
• D) a competitive industry.
• E) a concentrated oligopoly

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Definitions:

Materials Added

Raw materials introduced into the production process to create a product.

Equivalent Units

A concept in cost accounting used to apportion costs to partially completed goods, calculated by considering the work done on them as equivalent to a certain number of fully completed units.

Materials Entered

This term refers to the recording or entry of raw materials into the production process or inventory system.

Units Started

The number of items or products that a manufacturing process has begun producing during a specific period.