When Companies Do Not Want to Use Market Prices or Find

question 111

Multiple Choice

When companies do not want to use market prices or find it too costly, they typically use ________ prices, even though suboptimal decisions may occur.

• A) average-cost
• B) full-cost
• C) long-run cost
• D) short-run average cost

---

Definitions:

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a given price level in a given market at a specific time period.

Perfectly Inelastic

A situation where the quantity demanded or supplied does not change in response to a change in price.

Demand Curve

A graphical representation showing the relationship between the price of a good and the quantity of that good consumers are willing and able to purchase at various prices.

Price Elasticity

The degree to which the demand for a product is affected by price fluctuations, reflecting the price sensitivity of buyers.