If Demand Is Taken into Account, Firms That Use Cost-Plus

question 255

Multiple Choice

If demand is taken into account, firms that use cost-plus pricing can adjust price by

• A)letting sales fall, but hold the markup constant if demand falls.
• B)lowering markups on price-elastic goods and raising markups on price-inelastic goods.
• C)raising markups on price-elastic goods and lowering markups on price-inelastic goods.
• D)letting sales rise, but hold the markup constant if demand rises.

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Definitions:

Annual Premium

Annual Premium refers to the amount paid yearly for an insurance policy to keep it active and provide coverage.

Short-rate Refund

A refund of a portion of a premium on an insurance policy, calculated using a method that is less than pro-rata, often involving a penalty for early cancellation.

Annual Premium

The amount paid annually for an insurance policy, providing coverage over a specified period of time.

Short-rate Refunds

A partial refund of premium on an insurance policy that has been canceled by the policyholder before its expiration, calculated using a method that is less than prorated.