Which of the Following Is True Regarding Markets

question 126

Multiple Choice

Which of the following is true regarding markets?
I. Economists define a market as a geographic location where trade occurs.
II. A market enables buyers and sellers to get information about each other and to buy and sell from each other.
III. Markets coordinate decisions through prices.

• A) I only
• B) I and III
• C) II and III
• D) I, II and III

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Definitions:

Contribution Margin

The difference between the sales revenue of a company and its variable costs, indicating how much contributes to covering its fixed costs and generating profit.

Sales Volume

The total quantity of sales or units sold within a particular time frame.

Break-Even Point

The point at which total costs equal total revenues, meaning the business is not making a profit or a loss.

Direct Material

Raw materials that can be physically and directly associated with the finished product during the manufacturing process.