The competitive firm is referred to as a price because it cannot change market price; it can only adjust to it.

The market price becomes competitive due to firms' competition but only when there are many firms in the market.

A firm’s pricing objectives must be compatible with:

Understanding the price strategies a competitor uses will assist a business to be financially viable by:

. Perfectly competitive firms are price takers because a. each firm is very large. b. there are no good substitutes for their goods. c. many other firms produce identical products. d. their demand curves are downward sloping 9. A price-taking firm a. cannot influence the price of the product it sells. b. talks to rival firms to determine the best price for all of them to charge. c. sets the product's price to whatever level the owner decides upon. d. asks the government to set the price of its product. 10. A monopoly is a market with a. no barriers to entry. b. many substitutes. C. many suppliers. d. one supplier 11.Which of the following advantages does a budget mostly provide? a. Coordination is increased b. Planning is emphasized c. Coordination is continuous d. Comparison of actual versus budgeted data. 12.Budgets are related to which of the following management functions? a. Planning b. Performance evaluation c. Control d. All of these 13.A formal written statement of management ‘s plans for the future, packaged in financial items, is a a. Responsibility report b. Performance report. c. Cost of production report d. Budget 14.The budget approach that is more relevant when the continuance of an activity or operation must be justified on the basis of its need or usefulness to the organization. a. The incremental approach b. The zero-based approach c. The base-line approach d. Both(a)and(b) are there. 15. series of budgets for varying levels of activity is a a. Variable cost budget b. Master budget c. Flexible budget d. Aero-based budget 16.A common starting point in the budgeting process is a. Expected future net-income b. Past performance c. To motivate the sales force. d. A clean slate, with no expectation. 17.Budgeting process in which information flows top down and bottom up is referred to as: a. Continuous budgeting b. Perpetual budgeting c. Participative budgeting d. Joint budgeting 18.Zero-based budgeting: a. Involves the review of changes made to an organisation’s original budget. b. Does not provide a summary of annual projections. c. Involves the review of each cost component from cost-benefit perspective d. Emphasizes the relationship of effort to projected annual reports. 19. Incremental Budgeting’ refers to a. Line-by-line approach of expenditure b. Setting budget allowances based on prior year expenditure c. Requiring top management approval of increases in budgets d. Using incremental revenues and costs in budgeting.

A competitive market is one in whicha.there is only one seller of the product.b.each seller attempts to compete with other sellers, causing fewer sellers in the market.c.each seller of the product is free to set the price of his product.d.there are so many buyers and many sellers that each has a negligible impact on price.