Including Both Internal and External Costs When Setting a Price

question 37

Multiple Choice

Including both internal and external costs when setting a price for a good or service is an example of ______ cost.

• A)overall
• B)valuation
• C)total
• D)marginal
• E)true

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Definitions:

Perfectly Competitive

An alternative term for perfect competition, emphasizing a market scenario with many buyers and sellers and no barriers to entry.

Marginal Cost Curve

A graphical representation that shows how the cost of producing one more unit of a good or service varies as production increases.

Average Variable Cost Curve

A graphical representation showing how the average variable cost changes as the quantity of output is increased.

Firm

An organization that produces goods or services for sale, operating with the aim of making a profit.