To Sell an Extra Unit of Output, a Perfectly Competitive

question 73

Multiple Choice

To sell an extra unit of output, a perfectly competitive firm ________, and an imperfectly competitive firm ________.

• A)need not alter its price; must lower its price
• B)must hope the market price falls; must lower its price
• C)need not alter its price; need not alter its price
• D)must lower its price; must lower its price

---

Definitions:

Production Budget

A detailed plan showing the number of units that must be produced during a period in order to satisfy both sales and inventory needs.

Direct Materials Budget

A detailed plan showing the amount of raw materials that must be purchased to fulfill the production budget and to provide for adequate inventories.

Production Budget

An estimate of the total amount of production, often expressed in units, that a company plans to manufacture during a specific period.

Finished Goods Inventory

The stock of completed products that are ready to be sold but are still in the company's inventory.