In the Long Run, the Supply Curve for a Perfectly

question 32

Multiple Choice

In the long run, the supply curve for a perfectly competitive industry:

• A) will shift to the right if new firms enter the industry.
• B) is the sum of all individual firms' average total cost curves.
• C) is horizontal at the market price.
• D) is the same as the marginal cost curve over all levels of output.

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Definitions:

Direct Method

A way of allocating service department costs directly to production departments without intermediate steps.

Operating Activities

The day-to-day activities of a business involved in producing and delivering its products and services, generating cash flows from these primary activities.

Income Tax Expense

The total amount of income tax a company is obligated to pay to the government, based on its taxable income for a particular period.

Cash Basis

An accounting method where revenues and expenses are recognized only when cash is received or paid out, respectively.