Which of the Following Best Describes a Competitive Industry

question 49

Multiple Choice

Which of the following best describes a competitive industry?

• A) Its firms sell similar products and have little control over their prices; there are many buyers and sellers and each is relatively small compared with the overall market.
• B) Its firms sell similar products and have direct control over their prices; there are many buyers and sellers and each is relatively small compared with the overall market.
• C) Its firms have little control over the price of their product; the demand curve for each firm's product is downward sloping; there are many firms.
• D) Its firms sell differentiated products and there are few potential sellers. They have little control over the price of their product; there are many relatively small buyers.

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Definitions:

Factory Overhead

Costs incurred during the manufacturing process that are not directly applicable to individual products, such as maintenance and utilities.

Direct Labor

The workforce engaged directly in the manufacturing process, whose wages are considered part of the production cost.

Sales Activity

The actions and processes involved in the selling of goods or services, including promotion, negotiation, and distribution.

Ending Work in Process

The value of partially completed goods at the end of an accounting period, comprising material, labor, and overhead costs.