Though Large Firms Have the Knowledge and Resources to Utilize

question 153

Multiple Choice

Though large firms have the knowledge and resources to utilize a better pricing strategy, many choose to use cost-plus pricing.One reason for this is that

• A)large firms do not have to maximize their profits because they face little competition from other firms.
• B)there is less risk of violating antitrust laws if a cost-plus pricing strategy is used rather than a profit-maximizing pricing strategy.
• C)the additional revenue that would result from a profit-maximizing pricing strategy is an insignificant fraction of the firms' revenues.
• D)firms often adjust the markup they charge to reflect current demand.

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Definitions:

Nineteenth Century

The period from January 1, 1801, through December 31, 1900, marked by significant industrial, cultural, and political changes worldwide.

Oligopoly

A market structure characterized by a small number of large firms that dominate the market, often leading to limited competition.

Railroads

Transportation systems consisting of tracks on which trains travel to carry goods and passengers over long distances.

Nineteenth Century

The period from January 1, 1801, to December 31, 1900, marked by major social, economic, and technological changes worldwide.