In a Competitive Market with Free Entry and Exit,if All

question 68

Multiple Choice

In a competitive market with free entry and exit,if all firms have the same cost structure,then

• A)all firms will operate at efficient scale in the short run.
• B)all firms will operate at efficient scale in the long run.
• C)the price of the product will differ across firms.
• D)the number of sellers in the market will steadily decrease over time.

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Definitions:

Generate Revenues

The process of earning income from business activities, such as sales of goods and services.

Joint Costs

Expenses that are incurred in the process of producing two or more products up to the point where the products are separately identifiable.

Budgeted Costs

Estimated expenses planning for future periods, which companies use for managing financial resources and controlling expenditures.

Responsibility Accounting

This accounting methodology focuses on collecting, summarizing, and reporting financial information related to the responsibilities of individual managers.