"Cost-Plus-Markup" Pricing

question 30

Multiple Choice

"Cost-Plus-Markup" pricing:

• A)refers to the practice of some businesses of setting prices for their products by adding some percentage markup to an estimate of their marginal cost.
• B)is used by firms because they are unable to make reliable estimates of their rivals' sales.
• C)refers to the fact that businesses make profits only when prices are higher than average costs.
• D)is the name that businesses give to what the economist calls "maximizing profits through equating marginal cost and marginal revenue."
• E)is adopted, in part, because of the difficulty of estimating marginal revenue and marginal cost.

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Definitions:

Chromium

A lustrous, hard, and brittle metallic element that is used primarily in metal alloys and as a compound in industrial processes.

Carbon

A chemical element with the symbol C and atomic number 6, essential for all life, known for its ability to form a vast number of compounds.

Hydrogen

The lightest and most abundant chemical element in the universe, consisting of a single proton with one electron, often used in fuel cells and various industrial processes.

Mercury

A chemical element with the symbol Hg and atomic number 80, known as quicksilver; a heavy, silvery d-block element that is liquid at room temperature.