A Product Is a Price Leader When

question 229

Multiple Choice

A product is a price leader when:

• A) it is sold at the highest price.
• B) its price maximizes profits.
• C) an increase or decrease in price leads to increased revenue or lower costs.
• D) it is sold at a lower cost in the hope that sales of other products will increase.
• E) its price leads the industry in sales.

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Definitions:

Prime Costs

The direct costs of manufacturing, including direct labor and materials.

Direct Labour

The work done by employees directly involved in producing a product or delivering a service, often considered a variable cost.

Direct Materials

Direct materials are the raw materials that are directly traceable and allocable to a finished product in the manufacturing process, directly impacting the cost of goods sold.

Production Costs

The total expense incurred in the manufacture of a product, including labor, materials, and overhead.