Figure 14-7 Suppose a Firm Operating in a Competitive Market Has the Has

question 310

Multiple Choice

Figure 14-7
Suppose a firm operating in a competitive market has the following cost curves:

-Refer to Figure 14-7.Which line segment best reflects the short-run supply curve for this firm?

• A) ABCF
• B) CD
• C) DF
• D) BCD

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Definitions:

Flexible Budgets

Budgets that are designed to vary in accordance with changes in the level of activity or output, to provide more accurate costing and planning.

Spending Variance

The difference between the actual amount of the cost and how much the cost should have been, given the actual level of activity. A favorable (unfavorable) spending variance occurs because the cost is lower (higher) than expected, given the actual level of activity for the period.

Static Planning Budget

A projection of budget figures based on a fixed level of activity or volume, not adjusted for changes.

Flexible Budget

A budget that adjusts or varies with changes in the volume of activity, revenue, or other factors affecting budgetary needs.