Which of the Following Pricing Strategies Allows a Firm to Earn

question 53

Multiple Choice

Which of the following pricing strategies allows a firm to earn economic profit?

• A)Price discrimination
• B)Charging a price equal to marginal cost
• C)Charging a price equal to the average total cost of production
• D)Charging a price equal to the average variable cost of production

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Definitions:

Inventory

The complete list of goods or materials a company holds, intending to sell it in the regular course of business.

Conversion Costs

The combined costs of direct labor and manufacturing overheads that are incurred to convert raw materials into finished goods.

Raw And In Process

Materials that are either in their natural state and used in the manufacturing of products or materials that are partially processed but not yet completed.

Inventory

The total amount of goods and materials held by a company for the purpose of resale or production.