When Entrepreneurs in Competitive Industries Successfully Innovate to Lower Production

question 218

True/False

When entrepreneurs in competitive industries successfully innovate to lower production costs, it usually results in long-run economic profits for the firm.

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Definitions:

Sales Returns

Transactions where customers return previously purchased merchandise, leading to a reversal of sales revenue.

Allowances Account

An account used to offset the gross accounts receivable balance for the estimated amount of uncollectible accounts.

Credit Sale

A transaction where the goods or services are provided to the customer with payment to be made at a later date.

Accounts Receivable

This refers to the amount of money customers are yet to pay a company for the products or services which have already been provided.