Which of the Following Statements Is Not Correct About Competitive

question 280

Multiple Choice

Which of the following statements is not correct about competitive firms?

• A)In a long-run equilibrium, firms must be operating at their efficient scale.
• B)In the short run, the number of firms in an industry may be fixed.
• C)In the long run, the number of firms can adjust to changing market conditions.
• D)In the short run, firms must be operating at a level of output where price equals average variable cost.

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Definitions:

Inventory Item

Goods or merchandise kept on the premises of a business or warehouse and available for sale or distribution.

Historical Cost

The original cost at which an asset is acquired and recorded in the financial statements, not adjusted for inflation or market changes.

Replacement Cost

The cost to replace an asset of a company at the present time, according to its current worth.

Net Realizable Value

Net Realizable Value is the estimated selling price of goods minus the costs of their sale or completion, used to value inventory or accounts receivable in the context of impairments or realizable value considerations.