Assume Kalene Buys Notebooks in a Competitive Market

question 248

Multiple Choice

Assume Kalene buys notebooks in a competitive market. It follows that

• A)Kalene has a limited number of sellers from which to buy notebooks.
• B)Kalene will negotiate with sellers whenever she buys notebooks.
• C)Kalene cannot influence the price of notebooks even if she buys a large quantity of them.
• D)Kalene might have trouble finding notebooks at her local store.

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Definitions:

Differential Costs

The difference in total cost that will result from selecting one choice over another.

Sunk Costs

Sunk costs refer to money already spent and permanently lost, which cannot be recovered and should not influence future financial decisions.

Opportunity Costs

A rephrased definition: The potential gains or benefits that are lost when choosing one alternative over another in decision-making.

Gross Margin

The difference between sales revenue and the cost of goods sold, expressed as a percentage of sales revenue.