Which of the Following Is TRUE Concerning Prime Costs

question 32

Multiple Choice

Which of the following is TRUE concerning prime costs?

• A)Prime costs are direct manufacturing costs.
• B)They include indirect manufacturing labour.
• C)They equal the sum of direct manufacturing costs plus conversion costs.
• D)They equal the sum of fixed manufacturing costs plus conversion costs.
• E)They are indirect manufacturing costs.

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Definitions:

Downward-Sloping

Describes a line or curve on a graph that descends from left to right, indicating a negative relationship between two variables.

Purely Competitive

A market scenario where all participants sell indistinguishable goods, ensuring no one seller can influence prices, creating an ideal competition.

Market Supply Curve

A graphical representation showing the relationship between the price of a good and the total output of the good all producers are willing to supply.

Remaining Firms

Businesses that continue to operate in a market after others have exited, often due to competitive advantages or niches.