Which of the Following Is True for a Firm Operating

question 80

Multiple Choice

Which of the following is true for a firm operating under perfect competition,monopolistic competition and monopoly?

• A)Firms earn positive economic profits in the long run.
• B)Firms earn zero economic profits in the long run.
• C)Profits are maximised when marginal cost equals marginal revenue.
• D)Price equals marginal cost.
• E)Firms have to advertise.

Comprehend the principles of Management by Objectives (MBO) and its process.

Distinguish between positive and negative reinforcement in the context of control.

Acknowledge the importance of personal observation in the control process.

Understand the characteristics of effective controls within organizations.

---

Definitions:

Variable Manufacturing Costs

Costs that change in proportion to the level of production or sales volume, including costs such as raw materials, direct labor, and certain utilities directly involved in the manufacturing process.

Flexible Budget

A flexible budget that adapts to variations in activity levels or volumes, promoting precise budgeting and forecasting.

Manufacturing Costs

Expenses directly associated with the production of goods, including labor, materials, and overhead.

Direct Materials

The primary raw inputs used in the manufacture of products, which are directly traceable to the production process.