Which Term Refers to Prices That Buyers Carry in Their

question 131

Multiple Choice

Which term refers to prices that buyers carry in their minds and check with when they look at a given product?

• A) product line prices
• B) reference prices
• C) location-based prices
• D) product form prices
• E) time-based prices

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Definitions:

Accounting Costs

Explicit costs involving monetary payment or outlay by an organization or individual for goods or services.

Economic Profit

The difference between the total revenue generated by a business and the total costs, including both explicit and implicit costs.

Accounting Profit

The total revenue of a firm minus the explicit costs directly associated with its operation, such as materials and labor, calculated according to standard accounting practices.

Implicit Cost

The opportunity cost equal to what a firm must give up in order to use resources it already owns for production, without direct payment.