A Business Using Price Lining Is Doing Which of the Following

question 120

Multiple Choice

A business using price lining is doing which of the following?

• A) trying to avoid the use of psychological pricing, which may be negatively received by customers
• B) trying to recover its research and development costs for a new product
• C) attempting to achieve a large market share before any competitors can enter the marketplace
• D) selling items in a product line at different prices
• E) engaging in potentially unethical pricing

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Definitions:

Average Total Cost

The average cost per unit of output expressed as the total production cost divided by the number of units produced.

Average Total Cost

The total cost per unit of output, calculated by dividing the total cost by the quantity of output produced.

Efficient Scale

The level of production at which a firm operates with the lowest average total costs, achieving economies of scale without incurring diseconomies of scale.

Short-Run Cost Curves

Graphical representations that show the relationship between a firm's costs and output levels in the short term.