Producers Use Captive Product Pricing to Set the Price of the Main

question 11

Multiple Choice

Producers use captive product pricing to set the price of the main product ________ and set ________ on the supplies necessary to use the product.

• A)low; low markups
• B)high; low markups
• C)low; high markups
• D)high; high markups
• E)moderately; moderate markups

---

Definitions:

Insurance Coverage

The amount and type of protection provided under an insurance policy against potential losses.

Cost Formula

An equation used to calculate the total cost of production, which may include fixed costs, variable costs, or a combination of both.

Machine-Hours

Machine-hours measure the amount of time a piece of machinery is in operation and is often used as a basis for allocating manufacturing overhead.

Maintenance Cost

Expenses incurred in keeping property, equipment, or machinery in efficient operating condition, including both preventive and corrective measures.