In a Competitive Marketplace,prices Adjust Until

question 109

Multiple Choice

In a competitive marketplace,prices adjust until

• A) MRS's are equal to zero.
• B) excess supply equals excess demand equals zero in all markets.
• C) each consumer has maximized utility subject to his budget constraint.
• D) all firms earn zero profit.

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Definitions:

LIFO Cost of Goods Sold

An inventory costing method where the last items placed in inventory are considered the first ones sold, affecting the cost of goods sold during a period.

FIFO Inventory Costing

A method of inventory valuation where the cost of goods sold is based on the oldest inventory prices, which stands for "First In, First Out."

Ending Inventory

The total value of goods available for sale at the end of an accounting period, calculated as the beginning inventory plus purchases minus the cost of goods sold.

Goods Available for Sale

The total quantity of goods that a company has at its disposal to sell during a certain period, including both its initial inventory and purchases made.