Which of the Following Is a Problem Associated with Cost-Based

question 5

Multiple Choice

Which of the following is a problem associated with cost-based pricing?

• A)Time consuming & difficult to calculate fixed and variable costs
• B)Focuses on external issues rather than those internal
• C)May be hard to allocate costs in multi-product firms
• D)All of the above

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Definitions:

Utility

In economics, the satisfaction or benefit derived from consuming a good or service.

Consumer Surplus

The distinction between what consumers are willing and financially able to pay for a good or service versus the actual payment they make.

Vending Machine

An automated machine that provides items such as snacks, beverages, cigarettes, or lottery tickets to consumers after money, a credit card, or a specially designed card is inserted into the machine.

Consumer Surplus

The difference in the collective amount that consumers are poised and able to expend on a product or service and the amount they actually expend.