In a Perfectly Competitive Market You Observe That, After a Permanent

question 22

Multiple Choice

In a perfectly competitive market you observe that, after a permanent increase in demand in the long run, price increases. You can conclude that this market exhibits _______.

• A) external diseconomies
• B) economies of scale
• C) diseconomies of scale
• D) external economies

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Definitions:

Standard Cost

A detailed estimate of what a product should cost.

Past Cost Data

Historical financial information regarding the costs incurred by a business.

Ideal Standards

Standards that can be achieved only under perfect operating conditions, such as no idle time, no machine breakdowns, and no materials spoilage; also called theoretical standards.

Machine Breakdowns

Refers to the unexpected failures or malfunctions of machinery that disrupt the production process or operations.