Which of the Following Conditions Would Prevent a Firm from Setting

question 213

Multiple Choice

Which of the following conditions would prevent a firm from setting different prices in different markets?

• A) possibility of arbitrage for buyers between different markets
• B) law enforcement preventing smuggling from occurring
• C) government intervention forcing the firm to reduce the level of output
• D) government imposition of a price ceiling

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Definitions:

Predetermined Overhead Rate

A rate calculated before a production period based on estimated overhead costs and estimated activity, used to allocate overhead costs to products.

Predetermined Overhead Rate

An estimated rate used to allocate manufacturing overhead to individual products or projects, based on expected conditions.

Machine-Hours

A measure of manufacturing time that indicates the amount of time a machine is in use.

Machine-Hours

A measure of the amount of time that machinery is in operation, typically used as a basis for allocating manufacturing overhead costs.