Which of the Following Is Not a Necessary Characteristic of a Purely

question 104

Multiple Choice

Which of the following is not a necessary characteristic of a purely competitive industry?

• A) The industry or market demand is highly elastic.
• B) Firms can easily enter or leave the industry.
• C) There are so many small firms that no one firm can influence the market price.
• D) Consumers see no difference between the product of one firm and that of another.

---

Definitions:

CVP Analysis

Cost-Volume-Profit Analysis; a management accounting tool that helps understand the relationship between costs, volume, and profit.

Inventory

Inventory consists of goods and materials held by a business for the purpose of resale or as part of the production process.

Contribution Margin

The selling price per unit minus the variable cost per unit, used to cover fixed costs and contribute to net profit.

Selling Price

The price for which a product or service is sold to the customer.