Question

Consider the following statements regarding the economic pricing model:

I. The economic model is limited in use because a firm's demand curve is difficult to determine.
II. The marginal revenue and marginal cost model is valid for all forms of market organization (perfect competition, oligopoly, and so forth).
III. Cost accounting systems are not designed to measure the marginal changes in cost incurred as production and sales increase.
Which of the above statements is (are) true?
A. I only.
B. III only.
C. I and III.
D. II and III.
E. I, II, and III.

Answer 1

C. I and III.

Step-by-step explanation:

The demand curve is affected by many variables that can change in a relatively short period of time, for example, consumers' income. Even if a company is able to measure the demand curve, it cannot be sure for how long that result holds true. Managerial accounting is designed to measure historical costs generally associated to a certain production range.