Which of the Following Is a Characteristic of a Monopoly

question 129

Multiple Choice

Which of the following is a characteristic of a monopoly but not of a competitive market?

• A) A monopoly contains many firms.
• B) price > marginal cost
• C) price < marginal cost
• D) price = marginal cost
• E) A firm in a monopoly is a price taker.

Identify and differentiate between various costing methods like actual, budgeted, variable, and absorption costing.

Apply direct, step-down, and reciprocal methods for allocating support department costs.

Understand the impact of production and sales levels on profits under different costing methods.

Analyze the effect of fixed and variable costs on inventory valuation and profit reporting.

---

Definitions:

First-in, First-out Method

An inventory valuation method where the first items purchased or produced are the first ones to be sold or used, affecting the cost of goods sold and ending inventory valuation.

Bottling Department

A specific production area within a manufacturing facility focused on the filling, sealing, and packaging of beverages into bottles.

Equivalent Units

A measure used in cost accounting to express the amount of work done on partially finished goods in terms of fully finished units.

Conversion Costs

The sum of direct labor and manufacturing overhead costs, representing the expenses to convert raw materials into finished products.