Figure: Monopolistic Competition Reference: Ref 15-9 (Figure: Monopolistic Competition)

question 13

Multiple Choice

Figure: Monopolistic Competition Reference: Ref 15-9 (Figure: Monopolistic Competition) Refer to the figure. Suppose the figure represents a firm that operates in a monopolistically competitive market. In the long run you would expect:

• A) prices to increase.
• B) demand to become more inelastic.
• C) less quality and innovation.
• D) more firms to enter the market.

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Definitions:

Direct Labour Efficiency Variance

A measure used in management accounting to assess the difference between the actual hours worked and the standard hours expected to produce a certain level of output.

Direct Labour Price Variance

The difference between the actual cost of direct labor and the expected (or standard) cost, based on the actual hours worked.

Direct Labour Standards

Pre-determined measures of how much labor (time or cost) should be used to produce a unit of product or perform a service.

Total Cost

The complete cost of producing or acquiring goods or services, including both fixed and variable components.