Question

Under the gross method, the seller is not required to recognize Sales Discounts until the purchaser of those goods pays within the discount period.

A. True
B. False

Answer 1

The statement “In the goods market, no seller would be willing to sell for less than the equilibrium price” is false because sellers in a competitive market are price-takers. Sellers are willing to sell at any price above their marginal cost.

Step-by-step explanation:

The statement “In the goods market, no seller would be willing to sell for less than the equilibrium price” is false because sellers in a competitive market are price-takers, meaning they have no control over the price. The equilibrium price is determined by the intersection of the demand and supply curves, where quantity demanded equals quantity supplied. Sellers are willing to sell at any price above their marginal cost, as long as there are buyers willing to pay that price.

For example, if the equilibrium price is $10, a seller may be willing to sell for $9 if there are buyers willing to pay that price. The seller would still make a profit as long as the cost of producing the goods is less than $9.

Therefore, there can be instances where sellers are willing to sell for less than the equilibrium price in order to attract more buyers or reduce inventory.