In ________, the List Price of an Item Is Determined

question 57

Multiple Choice

In ________, the list price of an item is determined by adding a markup percentage to a product's cost.

• A) cost-based pricing
• B) compliance-based pricing
• C) value-based pricing
• D) competitive-based pricing
• E) economic-based pricing

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Definitions:

Economic Profit

The profit made by a firm after accounting for both its explicit (out-of-pocket) and implicit (opportunity) costs, providing a comprehensive measure of true profitability.

Wage Rate

The wage rate refers to the standardized amount of compensation a worker receives per unit of time, such as an hour or year, for their labor.

Variable Input

A variable input is a resource or factor of production whose quantity can be changed easily by a firm in response to changes in production volume or demand, such as labor or raw materials.

Marginal Product

The extra production achieved by the use of an extra unit of a specific input while keeping other inputs unchanged.