Technology Reduces the Average Cost of Production,so in the Long

question 124

Multiple Choice

Technology reduces the average cost of production,so in the long run
i.perfectly competitive firms produce at a lower average cost.
ii.the market price of the good falls.
iii.firms with older plants either exit the market or adopt the new technology.

• A) i only.
• B) i and ii.
• C) iii only.
• D) i and iii.
• E) i, ii, and iii.

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Definitions:

Matching

An accounting principle where expenses are recorded in the period they are incurred to generate revenues.

Ending Inventory

The total value of goods available for sale at the end of an accounting period.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company.

LIFO

A method of inventory valuation called "Last-In, First-Out," where the most recently acquired items are the first to be expensed.