A Disadvantage of Reciprocity Is That It Can Lead to

question 35

Multiple Choice

A disadvantage of reciprocity is that it can lead to

• A)a price war.
• B)higher promotional costs.
• C)more competitive firms entering the industry.
• D)less-than-optimal purchases for the buyer.
• E)longer periods of negotiation.

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Definitions:

Last Unit

Refers to the final item or unit produced or consumed, which can be significant in determining the marginal cost or utility.

Labor Employed

The total number of workers who are currently hired and working in a given sector or economy.

Marginal Resource Cost

The cost of producing one additional unit of a resource or input.

Variable Costs

Costs that change in proportion to the level of goods or services produced by a business, such as raw materials and labor expenses.