Which of the Following Statements Does NOT Apply to a Perfectly

question 86

Multiple Choice

Which of the following statements does NOT apply to a perfectly competitive market?

• A)There is freedom of entry and exit of firms in the industry.
• B)Consumers can shop for the lowest available price.
• C)Consumers prefer certain brands over others.
• D)All firms have realized the possible economies of scale.
• E)All firms in the industry are price takers.

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Definitions:

Time Period Assumption

an accounting principle that divides an enterprise's life into small periods of time for reporting and analysis purposes.

Economic Life

The expected period over which an asset remains useful to the owner or until it can generate economic benefits.

Artificial Time Periods

Divisions of time, not naturally occurring, created for the purpose of financial reporting, budgeting, or project scheduling.

Economic Entity Assumption

An accounting principle that treats a company as a separate entity from its owners or shareholders for financial reporting purposes.