The Extra Costs Incurred to Avoid Holding Cash When There

question 89

Multiple Choice

The extra costs incurred to avoid holding cash when there is inflation are called the:

• A)average costs of inflation.
• B)consumer price index costs.
• C)external costs.
• D)shoe leather costs.

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Definitions:

Double Marginalization

A scenario in which two or more firms at different stages of a supply chain apply their own markups, leading to inefficiencies and inflated prices for consumers.

Retail Price

The cost at which goods or services are sold to the public, typically higher than the wholesale price to include a markup for profit.

Manufacturer Markup

The difference between the cost to produce a good and its selling price, often added by manufacturers to cover costs and generate profit.

Exclusion of Markup

The practice of not including an additional amount to the cost of goods when pricing them, often to maintain competitive pricing.