Suppose You Were Asked to Determine Whether a Firm Was

question 68

Multiple Choice

Suppose you were asked to determine whether a firm was a price taker or a competitive price searcher by looking at a graph of the firm's cost and revenue curves. The key is that for the competitive price searcher,

• A) the firm's marginal revenue curve lies above and to the right of the demand curve, not below and to the left.
• B) there are only total costs, not variable costs, on the graph.
• C) the firm's demand curve is downward sloping, not a horizontal line.
• D) all of the above are true.

Apply cost information in calculating and forecasting cost behavior in specific scenarios.

Understand various methods of cost estimation and their applications.

Calculate the total cost of production at different levels of output.

Determine the cost formula for specific business scenarios using the high-low method.

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Definitions:

Labour Relations Board

A governmental authority that oversees and resolves disputes involving labor and management practices.

Collective Bargaining

The process by which employers and a group of employees negotiate labor contracts concerning wages, hours, benefits, and other working conditions.

Vicarious Liability

The liability at law of one person for the acts of another.

Negligent Misrepresentation

Negligent misstatements made by a professional to a client.