Cost-Plus Pricing

question 29

Multiple Choice

Cost-plus pricing

• A)is used only in oligopolistic market structures
• B)simplifies pricing policy by adding a markup to average total cost
• C)in actual practice leads to markups which are greater for more elastic demand curves
• D)is likely to increase profits more than the use of marginal analysis
• E)requires the firm to project the amount which will be sold and then "mark-up" the price based on average variable cost

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