Which of the Following Statements About a Perfectly Competitive Firm

question 86

Multiple Choice

Which of the following statements about a perfectly competitive firm is necessarily false?

• A)There are few substitutes for the firm's product.
• B)There are few complements to the firm's product.
• C)The firm produces the quantity at which marginal revenue equals marginal cost.
• D)The firm sells a product that is identical in the eyes of buyers to any other product sold in the industry.

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Definitions:

Ending inventory

The value of goods available for sale at the end of an accounting period, calculated as the beginning inventory plus purchases minus cost of goods sold.

Periodic system

A periodic system is an inventory management approach where inventory levels and the cost of goods sold are calculated at the end of each accounting period, rather than continuously.

Beginning inventory

This is the value of all the inventory (raw materials, work-in-process, and finished goods) that a company has at the start of an accounting period.

LIFO

An inventory valuation method that assumes the last items placed into inventory are the first ones sold; stands for Last In, First Out.