Cost-Plus Pricing Typically Does Not Result in Profit-Maximization

question 116

Multiple Choice

Cost-plus pricing typically does not result in profit-maximization.As a result, economists have two views of cost-plus pricing.One of these views is

• A)cost-plus pricing is more likely to lead to profit-maximization for large firms than for small firms.
• B)cost-plus pricing is a good way to approximate the profit-maximizing price when marginal revenue or marginal cost is difficult to determine.
• C)cost-plus pricing is more likely to lead to profit-maximization for monopolistically competitive firms than for oligopoly firms.
• D)cost-plus pricing is more likely to result in profit-maximization the more elastic the firm's demand curve is.

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Definitions:

Standard Deviation

A measure of the amount of variation or dispersion of a set of values, used in statistics and finance to measure risk or volatility.

Variance

A statistical measure of the dispersion or spread of a set of data points, indicating how much the numbers in the data set deviate from the mean.

Coefficient of Variation

A measure indicating the relative variability of a data set by dividing the standard deviation by the mean, often used to assess risks or volatility in finance.

Standard Deviation

A measure of the amount of variation or dispersion of a set of values, used in finance to quantify the risk of an investment.