Identify the False Statement

question 78

Multiple Choice

Identify the false statement.

• A)A monopolist and a perfectly competitive firm both maximize profits.
• B)A monopolist and a perfectly competitive firm both produce an output level where marginal revenue equals marginal cost.
• C)A monopolist and a perfectly competitive firm both produce where price equals marginal cost.
• D)A monopolist and a perfectly competitive firm both charge a price based on the demand curve facing the firm and the costs borne by the firm.

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Definitions:

Average Accounting Return

A measure used to evaluate the profitability of an investment, calculated as the average annual profit divided by the initial investment cost.

Payback Period

The length of time it takes for an investment to recover its initial outlay of cash, through income or savings.

Profitability Index

A calculation that determines the relationship between the costs and benefits of a proposed project through a ratio derived from present value of future cash flows divided by initial investment.

Net Present Value

An analysis that assesses the worth of a project or investment by comparing all incoming and outgoing cash flows against a discount rate.