It Is Usually Assumed That a Perfectly Competitive Firm's Supply

question 6

Multiple Choice

It is usually assumed that a perfectly competitive firm's supply curve is given by its marginal cost curve.In order for this to be true,which of the following additional assumptions are necessary? I.That the firm seek to maximize profits.
II.That the marginal cost curve be positively sloped.
III.That price exceeds average variable cost.
IV.That price exceeds average total cost.

• A)All of the above.
• B)I and II but not III and IV.
• C)I and III but not II and IV.
• D)I and II only.
• E)I,II and III,but not IV.

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Definitions:

Master Budget Activity Level

The projected volume of activity, such as sales or production, that is anticipated and used as a basis for the master budget.

Performance Report

A document that compares actual results to planned or budgeted results, often used in business to assess performance.

Actual Production

The measure of the quantity of goods or services produced by a company during a specific period.

Flexible Budget

A flexible budget adjusts according to the actual levels of activity experienced, allowing for more accurate comparisons of budgeted to actual performance.