Companies That Successfully Differentiate a Product Often Charge ____ Prices

question 30

Multiple Choice

Companies that successfully differentiate a product often charge ____ prices for them.

• A) premium
• B) exorbitant
• C) below cost
• D) average
• E) none of these choices

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Definitions:

Economic Profit

The difference between total revenue and the total costs of production, including opportunity costs not just explicit costs.

Long Run Equilibrium

A state in which all factors of production and costs are variable, and firms no longer have an incentive to enter or exit an industry, leading to a stable market condition.

Firm

A business organization that sells goods or services in order to make a profit.

Producer Surplus

The difference between what producers are willing to receive for a good or service and the actual amount they receive, due to the market price being higher.