If Demand Is Taken into Account, Firms That Use Cost-Plus

question 255

Multiple Choice

If demand is taken into account, firms that use cost-plus pricing can adjust price by

• A)letting sales fall, but hold the markup constant if demand falls.
• B)lowering markups on price-elastic goods and raising markups on price-inelastic goods.
• C)raising markups on price-elastic goods and lowering markups on price-inelastic goods.
• D)letting sales rise, but hold the markup constant if demand rises.

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Definitions:

Face Value

The nominal or dollar value printed on a bond, bill, or other financial instrument, representing the amount to be repaid at maturity.

Coupon Rate

The annual rate of interest specified on a bond, expressed as a percentage of its face value.

Annual Coupon

The yearly interest payment paid to bondholders, typically expressed as a percentage of the bond's face value.

Face Value

The nominal or initial value stated on financial instruments like bonds or stock certificates, not necessarily equal to the market value.