Figure 10-12

question 211

Multiple Choice

Figure 10-12
-Refer to Figure 10-12. Panel (a) shows a profit-maximizing competitive price-searcher firm that is

• A) earning zero economic profit.
• B) likely to exit the market in the long run.
• C) producing its efficient scale of output.
• D) not maximizing its profit.

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Definitions:

Quantity Variance

The difference between the actual quantity of materials or inputs used in production and the standard expected quantity, impacting costs.

Total Cost Variance

The difference between the budgeted or standard cost of an activity and its actual cost.

Direct Labor

Costs associated with the employees who are directly involved in the production of goods or services, such as wages for factory workers.

Rate Variance

The difference between the actual rate paid for something and the standard or expected rate, often used in budgeting and cost management.