Relevant Costs of a Bidding Decision Should EXCLUDE Revenues Lost

question 92

True/False

Relevant costs of a bidding decision should EXCLUDE revenues lost on lower-priced sales to existing customers.

---

Definitions:

Long-run Profit

The amount of financial gain achieved over a longer period, taking into account all fixed and variable costs.

Market Demand Curve

Curve relating the quantity of a good that all consumers in a market will buy to its price.

Demand Curve

A graphical representation showing the relationship between the price of a good and the quantity of the good that consumers are willing to purchase at various prices.

Incumbent Firm

An established company that holds a dominant position in a particular market or industry.