Which of the Following Statements Regarding a Competitive Market Is

question 5

Multiple Choice

Which of the following statements regarding a competitive market is not correct?

• A)There are many buyers and many sellers in the market.
• B)Because of firm location or product differences, some firms can charge a higher price than other firms and still maintain their sales volume.
• C)Price and average revenue are equal.
• D)Price and marginal revenue are equal.

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Definitions:

Time Value

The principle that current money holds greater value than an identical sum in the future because of its earning potential.

Net Present Value Method

A method used in capital budgeting to evaluate the profitability of an investment or project by calculating the present value of expected future cash flows.

Net Present Value

A financial metric used to evaluate the profitability of an investment, calculated by subtracting the present value of cash outflows from the present value of cash inflows over a period of time.

Rate of Return

This is a measure of the profitability of an investment, calculated as a percentage of the original investment.