The Short-Run Supply Curve in a Price-Taking Industry Is the

question 443

Multiple Choice

The short-run supply curve in a price-taking industry is the

• A) horizontal summation of the individual firms' MC curves above ATC.
• B) horizontal summation of the individual firms' MC curves above AVC.
• C) horizontal summation of the individual firms' AVC curves above MC.
• D) vertical summation of ATC curves above AVC.

---

Definitions:

Ending Inventory

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

Gross Profit Method

An accounting technique used to estimate inventory levels and cost of goods sold by utilizing the gross profit margin.

Net Sales

The total revenue from sales minus returns, allowances for damaged or missing goods, and discounts.

Moving-Average Method

The Moving-Average Method is an inventory costing method that averages the costs of inventory over time to determine the value of sold and remaining stock.