What Costs Are Used in Incremental-Cost Pricing

question 222

Multiple Choice

What costs are used in incremental-cost pricing?

• A) all relevant variable costs in setting a product's price
• B) costs based on price theory and profit maximization
• C) only those costs that are directly attributable to a specific output
• D) all fixed costs that are not attributable to total variable cost (TVC)

---

Definitions:

Loanable Funds

The total resources or funds available for borrowing, typically within a nation's financial markets, where savers supply funds and borrowers demand them.

Interest Income

Earnings received from deposit accounts like savings, or from investments like bonds, calculated as a percentage of the principal.

Loanable Funds Model

An economic model that describes the market where borrowers and lenders interact, determining the equilibrium interest rate and quantity of loanable funds.

Interest Rates

The amount of a loan that is incurred as interest by the borrower, customarily specified as an annual percentage of the loan in question's remaining value.