In Perfect Competition,no Individual Producer Can Significantly Affect the Market

question 102

Multiple Choice

In perfect competition,no individual producer can significantly affect the market price because

• A)the market is regulated by the government
• B)each producer is ignorant of the market price
• C)each producer provides a very small portion of the total market supply
• D)strictly enforced collusion prevents any producer from acting independently
• E)each firm's product is so different that there is no market price

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Definitions:

Periodic Inventory System

An inventory accounting system where the inventory level is updated and the cost of goods sold is calculated at the end of a period, rather than after each sale.

Purchases Account

An account used in accounting to record the total cost of goods bought for resale during an accounting period.

Freight In

The cost of transporting goods into a business, usually included in the cost of inventory.