The Firm Is in a Decreasing Cost Industry,and Its Prices

question 8

Multiple Choice

The firm is in a decreasing cost industry,and its prices are based upon strict marginal costs.The firm experiences a loss.In this case,for the firm to recover its fixed costs,it must use marginal cost as a floor for its prices,and:

• A) try to take business away from competing modes and carriers.
• B) convince its customers to pay more for the services offered.
• C) use the value of service to determine how high above marginal cost the price should be set.
• D) ask the government to intervene so they can raise the minimum cost level.

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Definitions:

Married Filing Jointly

A tax filing status for married couples that allows them to file one tax return jointly, combining their incomes and deductions.

Single Taxpayer

A filing status for unmarried individuals that allows them to report their income and deductions on their federal tax return.

Wages

Compensation received by employees for services performed, usually based on hours worked or amount of work done.

Personal Exemption

A specific amount that taxpayers could deduct from their taxable income for themselves and their dependents, applicable in tax years before 2018.