Which of the Following Examples Best Describes the Concept of Free

question 172

Multiple Choice

Which of the following examples best describes the concept of free entry?

• A) Jack opening an account on eBay to sell his old cell phone
• B) Purecircuit Corp. wanting to expand its production and therefore doubling its annual recruitment
• C) System Corp. deciding to charge a price lower than the market price to increase its market share
• D) The government entering the market for gasoline to correct any shortage or surplus in the market

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Definitions:

Days' Sales

A financial metric that measures the average time it takes for a company to turn its inventory into sales.

Receivables

Money owed to a company by its customers from sales or services rendered, recorded as an asset on the balance sheet.

Inventory

The total amount of goods and materials held by a company, intended for sale or production.

Payables

Short for accounts payable; money owed by a company to its suppliers or creditors for products and services received but not yet paid for.