Because There Are Many Firms with Similar Products in Purely

question 34

Multiple Choice

Because there are many firms with similar products in purely competitive markets,

• A) price is determined by the laws of supply and demand.
• B) consumers develop personal preferences.
• C) firms find it easy to build strong, distinct brands.
• D) advertising is heavily used.
• E) the many competitors will focus on variable cost pricing.

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Definitions:

Decrease Net Income

Refers to a reduction in the net earnings as reported on an entity's income statement, influenced by costs, expenses, or losses.

Accrual

The accounting method that recognizes revenues and expenses when they are incurred, regardless of when cash transactions occur.

Wages Expense

The total cost incurred by a company for the salaries or wages of its employees.

Adjust Unearned Revenue Account

The process of recognizing revenue that was received in advance as it is earned based on the delivery of goods or services.