Which of These Is Likely to Be True of Perfect

question 118

Multiple Choice

Which of these is likely to be true of perfect competition but not of monopoly?

• A)A firm can produce a good only if government licenses authorize it to produce the good.
• B)A firm can sell a good in the market only if the government grants a patent to the firm.
• C)A firm can earn economic profit in the long run.
• D)A firm can shut down in the short run only if the price charged by it exceeds the average variable cost of production.
• E)A firm can face competition from new entrants into the market in the long run.

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Definitions:

Sales Discounts

Reductions granted on the selling price of goods or services to encourage prompt payment by customers.

Sales Returns

Transactions where customers return previously purchased merchandise, leading to a refund or credit.

Sales Returns

Transactions where customers return previously purchased merchandise, leading to a deduction from the gross sales to arrive at the net sales figure.

Debit Balance

A situation where the total debits exceed the total credits in an account.