An Assumption of a Competitive Market Is That Both Buyers

question 60

Multiple Choice

An assumption of a competitive market is that both buyers and sellers are price takers. When we go to the mall to shop for clothing or to the grocery to buy food, what do we usually observe?

• A) Both buyers and sellers are usually price takers.
• B) Buyers are often price takers, but sellers are usually price makers.
• C) Buyers are often price makers, but sellers are usually price takers.
• D) Both buyers and sellers are usually price makers.

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Definitions:

Standard Costs

Pre-determined or estimated costs to perform an operation, produce a product, or offer a service, used as a basis for pricing and budgetary control.

Work In Process Inventory

Items that are partially completed in a manufacturing process but are not yet finished goods.

Standard Control Account

An account used to monitor variances between actual costs and standard (expected) costs within an accounting period.

Sales Volume Variance

A measure used to assess the impact of the difference between actual sales volume and budgeted sales volume on revenue.