Which of These Would Be Associated with a Perfectly Competitive

question 272

Multiple Choice

Which of these would be associated with a perfectly competitive market?

• A) a market with many sellers, with each producing a similar though not identical version of a product
• B) a market with high costs of entry into the industry
• C) a market in which firms sell their product at the market equilibrium price
• D) a market in which firms are impacted significantly by the actions of the other firms

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Definitions:

Direct Method

A way of preparing the cash flow statement where actual cash inflows and outflows from operating activities are reported, as opposed to the indirect method.

Operating Expenses

The costs associated with the normal operations of a business, such as rent, utilities, and payroll, excluding cost of goods sold.

Dividends

Payments made by a corporation to its shareholder members, usually as a distribution of profits.

Indirect Method

A way of preparing the cash flow statement where net income is adjusted for changes in balance sheet accounts to reflect cash transactions.