In a Competitive Market, the Actions of Any Single Buyer

question 136

Multiple Choice

In a competitive market, the actions of any single buyer or seller will

• A)have a negligible impact on the market price.
• B)have little effect on market equilibrium quantity but will affect market equilibrium price.
• C)affect marginal revenue and average revenue but not price.
• D)adversely affect the profitability of more than one firm in the market.

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Definitions:

Bad Debt Expense

An expense reported on the income statement, representing the amount of receivables a company does not expect to collect.

Allowance for Doubtful Accounts

A contra-asset account that represents an estimate of the amount of accounts receivable which may not be collected, reducing the gross amount of receivables reported on the balance sheet.

Balance Sheet

A report detailing a firm's assets, liabilities, and owners' equity at a particular moment, offering a glimpse into its financial health.

Contra-Asset Account

An account on a company's balance sheet that reduces the value of a related account.