The Profit-Maximizing Rule MC = P Is Followed by Firms

question 92

Multiple Choice

The profit-maximizing rule MC = P is followed by firms under:

• A) monopolistic competition, but not perfect competition.
• B) perfect competition, but not monopolistic competition.
• C) both monopolistic competition and perfect competition.
• D) either monopolistic competition or perfect competition, depending on the costs of production.

---

Definitions:

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity levels of a company, allowing for more accurate budgeting.

Materials

Basic elements or substances used in the production or manufacturing of goods.

Spending Variance

The difference between the actual amount spent and the budgeted or planned amount in a given period.

Planning Budget

A budget prepared for a specific level of activity, used for planning and controlling costs and resources in advance.