________ Pricing Involves Setting Prices Based on the Costs for Producing,distributing,and

question 43

Multiple Choice

________ pricing involves setting prices based on the costs for producing,distributing,and selling the product plus a fair rate of return for the company's efforts and risks.

• A)Value-based
• B)Fixed cost
• C)Cost-based
• D)Variable cost
• E)Cost-skimming

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Definitions:

Pigouvian Tax

A tax levied on activities that generate negative externalities, intended to correct the market outcome by internalizing the external costs.

Socially Optimal Level

The level of production or activity where the social benefits of consuming a good equal the social costs of producing it, often considered ideal from a societal perspective.

Per-unit Subsidy

A financial aid provided by the government for each unit of a product produced or sold.

Private Market-clearing

The process by which supply and demand balance out at a price where the quantity supplied equals the quantity demanded in a private marketplace, without excess surplus or shortage.