Under Perfect Competition

question 26

Multiple Choice

Under perfect competition

• A)economic profits are greater than accounting profits.
• B)the most efficient output is always the most profitable level of output.
• C)the firms demand and marginal revenue curves are equal only in the short run.
• D)economic profits are always zero in the long run.

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Definitions:

Compensation Expense

The total cost incurred by a business for the payment of salaries, wages, benefits, and other forms of compensation to employees.

Options Pricing Model

A mathematical model used to determine the theoretical value of options, taking into account factors like the stock price, strike price, and volatility.

Compensatory Stock Option Plan

A benefit plan for employees which gives them the right to purchase company shares at a future date at a price established when the option is granted.

Employee Turnover

The rate at which employees leave a company and are replaced by new employees over a particular period.