In Models with Perfect Competition

question 50

Multiple Choice

In models with perfect competition:

• A) economic profits are always positive.
• B) accounting profits are zero.
• C) income paid to labor is the same as is paid to capital.
• D) the real interest rate is equal to the nominal interest rate.
• E) economic profits are zero.

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Definitions:

Perpetual Inventory System

A method of maintaining inventory records where updates are made continuously after each purchase or sale.

Inventory on Hand

The total quantity of goods or materials in stock at a given time within a business, available for sale or production.

Delivery Expense

Costs associated with the transportation of goods from the place of production to the destination point or customer.

Shipping Costs

Expenses associated with the transportation of goods from one location to another, often borne by the seller or buyer as per the sales contract.