Which of the Following Is True of a Competitive Market

question 64

Multiple Choice

Which of the following is true of a competitive market?

• A)In a competitive market, firms do not compete with each other.
• B)In a competitive market, the firm that charges the minimum price earns the maximum revenue.
• C)In a competitive market, the price of each unit of good is equal to the average variable cost.
• D)In a competitive market, every seller charges a different price for its output.
• E)In a competitive market, the price of each unit of the good is fixed.

---

Definitions:

Fixed Manufacturing Overhead

Costs that do not vary with the level of production or sales, such as salary of the factory manager and rent of the manufacturing facility.

Overhead Applied

The allocation of overhead costs to specific jobs or cost objects based on a predetermined rate.

Standard Direct Labor-Hours

The predetermined estimate of the labor hours required to produce one unit of a product.

Fixed Manufacturing Overhead

Costs in manufacturing that do not change with the level of production, such as rent, salaries, and insurance.