Suppose a Perfectly Competitive Market Is in Long-Run Equilibrium with a Price

question 212

Multiple Choice

Suppose a perfectly competitive market is in long-run equilibrium with a price of $12.Then there is a permanent increase in demand.As a result,in the short run the market price ________ and in the long run the number of firms ________ and the price is ________ the price was in the short run.

• A) rises; does not change; is equal to
• B) rises; increases; higher than
• C) rises; does not change; lower than
• D) falls; decreases; is equal to
• E) rises; increases; lower than

Analyze the implications of standard costing for employee motivation and performance assessment.

Understand the concept of standard costing and variance analysis.

Calculate direct material price, quantity, and total variances.

Calculate direct labor rate, efficiency, and total variances.

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Definitions:

Outstanding Principal

The remaining amount of money borrowed on a loan or bond that has not yet been repaid.

Equity Capital

Funds raised by a company in exchange for a share of ownership in the company.

Venture Capital

Financing that investors provide to startup companies and small businesses that are believed to have long-term growth potential.

Factoring Accounts Receivable

A financial transaction where a business sells its accounts receivable to a third party at a discount, in order to obtain immediate cash flow.