To Offset the Pricing of Its Main Product, the Toronto

question 12

Multiple Choice

To offset the pricing of its main product, the Toronto Zoo has partnered with a waste management company to turn animal waste into methane gas to be used to produce power. This is an example of ________.

• A)product line pricing
• B)optional-product pricing
• C)captive-product pricing
• D)by-product pricing
• E)allowance pricing

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Definitions:

Excess Capacity

A situation where a firm produces at a level less than its maximum output, often resulting in inefficiencies or higher production costs per unit.

Monopolistically Competitive

A market structure where many firms sell products that are similar but not identical, allowing for some degree of market power in setting prices.

Average Total Cost

The total cost of production divided by the number of units produced, indicating the cost per unit of output.

Marginal Cost

The additional cost incurred by producing one more unit of a product or service, an essential concept for understanding optimal production levels and pricing strategies.