What Signals the Entry and Exit Decisions of Firms in a Competitive

question 103

Multiple Choice

What signals the entry and exit decisions of firms in a competitive market

• A)high or low demand for a firm's product
• B)high capital costs
• C)low capital costs
• D)profits and losses

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Definitions:

Direct Materials Cost

The cost of raw materials directly used in the production of goods or services.

Overhead Cost

All ongoing business expenses not directly attributed to creating a product or service, including rent, utilities, and salaries of non-production staff.

Activity Rates

Are used in activity-based costing to allocate costs to products or services based on the activities required for their production or delivery.

Activity-Based Costing

A costing method that assigns overhead and indirect costs to specific activities, improving accuracy in product costing.