Suppose the Equilibrium Price in a Perfectly Competitive Industry Is

question 233

Multiple Choice

Suppose the equilibrium price in a perfectly competitive industry is $10 and a firm in the industry charges $12.Which of the following will happen?

• A)The firm will sell more output than its competitors.
• B)The firm's revenue will increase.
• C)The firm will not sell any output.
• D)The firm's profits will increase.

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Definitions:

Periodic System

A method in accounting where inventory levels are updated in the financial records periodically at the end of a reporting period.

Cost of Goods Sold

The expenses incurred directly from the production of a company's sold products, comprising materials and labor.

Net Income

The income left over after deducting all costs, taxes, and expenses from the total revenue.

Balance Sheet

A financial summary indicating a company's assets, outstanding liabilities, and the total equity of its shareholders at a determined point in time.