-Consider the Typical Monopolistically Competitive Firm Whose Demand Curve and Cost

question 6

Multiple Choice

-Consider the typical monopolistically competitive firm whose demand curve and cost structure is illustrated in Figure 11-5.Which of the following statements is correct in the long run?

• A)Some firms will exit this market,and the demand curves facing the remaining firms will shift rightward.
• B)Some firms will exit this market,and the demand curves facing the remaining firms will shift leftward.
• C)Firms will enter this market,and the demand curves facing the remaining firms will shift rightward.
• D)Firms will enter this market,and the demand curves facing the remaining firms will shift leftward.
• E)Firms will enter this market,but the demand curves facing the remaining firms will not change

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Definitions:

Actual Direct Labor Cost

Actual direct labor cost is the total amount of money paid for the wages of laborers directly involved in the production of goods or services.

Labor Efficiency Variance

The difference between the actual hours worked and the standard hours allowed, multiplied by the standard labor rate, indicating efficiency in labor usage.

Direct Labor Standards

The predetermined amount of labor time and cost that it should ideally take to produce one unit of a product, used for budgeting and performance evaluation.

Actual Direct Labor Cost

The total expense incurred from the wages and associated benefits of workers directly involved in the manufacturing of a product.