In a Situation of Long-Run Equilibrium,which Statement Explains the Differences

question 67

Multiple Choice

In a situation of long-run equilibrium,which statement explains the differences between a perfectly competitive firm and a monopolistically competitive firm

• A)A perfectly competitive firm operates at excess capacity.
• B)A monopolistically competitive firm does not operate at its efficient scale.
• C)A competitive firm charges a markup over marginal cost.
• D)A perfectly competitive firm operates at an inefficient scale.

---

Definitions:

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including labor, material, and overhead expenses.

Fixed Budget

A budget that remains unchanged over the budget period regardless of changes in the level of activity.

Variances

Variances refer to the differences between planned, budgeted, or standard costs and the actual costs incurred, indicating deviations in financial and operational performance.

Closing

The process of finalizing accounts at the end of an accounting period by transferring balances to permanent accounts.