When a Firm Charges $4

question 202

Multiple Choice

When a firm charges $4.95 instead of $5.00, what do economists call this pricing strategy?

• A)cost-plus pricing
• B)indirect pricing
• C)odd pricing
• D)unusual pricing

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Definitions:

Specialize

To focus on a particular area of study, work, or production, often improving efficiency and quality in that domain.

Trade

An exchange of goods or services between two or more parties.

Production Possibilities

The various combinations of goods and services that can be produced from a fixed set of resources.

Specialization

Specialization involves focusing on a narrow area of knowledge or skill, enabling individuals or firms to produce goods or services more efficiently.