The Firm Is in a Decreasing Cost Industry, and Its

question 43

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:

Social Consensus

The level of agreement among members of a society or group on specific issues, norms, or values.

Public Agreement

A consensus or accord reached among the general public or within a specific community.

Equitable Outcome Principles

Guidelines or practices aimed at ensuring fairness and justice in the distribution of resources, opportunities, and outcomes among members of a community or organization.

Ethical Principles

The foundational guidelines that dictate what is right, fair, and just behavior within society or certain professions.