A Publishing House Is Using 400 Printers and 200 Printing

question 2

Multiple Choice

A publishing house is using 400 printers and 200 printing presses to produce books.The printers' wage rate is $20 and the price of a printing press is $100.The last printer added 20 books to total output,while the last printing press added 50 books to total output.The publishing house

• A)is using the cost-minimizing combination of printers and printing presses.
• B)should use more printers because they are cheaper than printing presses.
• C)should use more printing presses because they are more productive than printers.
• D)could produce the same number of books at a lower cost by using more printing presses and fewer printers.
• E)could produce the same number of books at a lower cost by using more printers and fewer printing presses.

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Definitions:

Fixed-price Policy

A fixed-price policy is a pricing strategy where the seller sets a specific price for a product or service that is not subject to change based on fluctuations in the market or inventory levels.

Penetration Pricing

A pricing strategy where the price of a product is initially set low to enter a competitive market and attract customers.

Skimming Pricing

A pricing strategy where a firm sets relatively high prices at the launch of a new product or service to maximize profits from customers willing to pay more.

Fixed-price Policy

A pricing strategy where the price of a product or service is set and not subject to change based on market fluctuations.