Flexible-Price Policy Refers to

question 390

Multiple Choice

flexible-price policy refers to

• A) setting the price of a line of products at a number of different specific pricing points.
• B) setting the prices for all items in a product line to cover the total cost and produce a profit for the complete line, not necessarily for each item.
• C) deliberately selling a product below its customary price, not to increase sales, but to attract customers' attention in hopes that they will buy other products as well.
• D) setting different prices for products and services depending on individual buyers and purchase situations.
• E) Adding a fixed percentage to the cost of all items in a specific product class.

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Definitions:

Diseconomies of Scale

Increases in cost per unit when output is expanded, often due to inefficiencies arising from becoming too large.

Certified Public Accountants

Professionals who have passed the CPA examination and met all other state certification requirements, authorized to provide accounting services to the public.

Diseconomies of Scale

A situation where, as a firm increases its production, the costs per unit increase.

Constant Returns to Scale

A situation in which increasing the amount of inputs results in a proportional increase in outputs.