Figure 15-18 -Refer to Figure 15-18. If There Are No Fixed Costs

question 635

Multiple Choice

Figure 15-18
-Refer to Figure 15-18. If there are no fixed costs of production, monopoly profit with perfect price discrimination equals

• A)$0.
• B)$1,000.
• C)$2,000.
• D)$4,000.

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Definitions:

Periodic system

A periodic system is an inventory management approach where inventory levels and the cost of goods sold are calculated at the end of each accounting period, rather than continuously.

Beginning inventory

This is the value of all the inventory (raw materials, work-in-process, and finished goods) that a company has at the start of an accounting period.

LIFO

An inventory valuation method that assumes the last items placed into inventory are the first ones sold; stands for Last In, First Out.

Cost

A payment of cash (or a commitment to pay cash in the future) for the purpose of generating revenues.