Which of the Following Is True of a Perfectly Competitive

question 138

Multiple Choice

Which of the following is true of a perfectly competitive firm?

• A) The firm is a price maker.
• B) If the firm wishes to maximize profits it will produce an output level in which total revenue equals total cost.
• C) The firm will not earn an economic profit in the long run.
• D) The firm's short-run supply curve is its MC curve below its AVC curve.

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Definitions:

GAAP Requirements

The standards or guidelines for financial accounting and reporting that accountants are required to follow, known as Generally Accepted Accounting Principles.

Vacation Pay

Compensation paid to employees for days they are entitled to take off work but choose to work instead or as a benefit for days they are allowed not to work.

Sick Pay

Compensation provided by an employer to an employee who is absent from work due to illness.

Accrual

Accrual accounting is an accounting method where revenues and expenses are recorded when they are earned or incurred, regardless of when the cash transaction occurs.