Though Large Firms Have the Knowledge and Resources to Utilize

question 153

Multiple Choice

Though large firms have the knowledge and resources to utilize a better pricing strategy, many choose to use cost-plus pricing.One reason for this is that

• A)large firms do not have to maximize their profits because they face little competition from other firms.
• B)there is less risk of violating antitrust laws if a cost-plus pricing strategy is used rather than a profit-maximizing pricing strategy.
• C)the additional revenue that would result from a profit-maximizing pricing strategy is an insignificant fraction of the firms' revenues.
• D)firms often adjust the markup they charge to reflect current demand.

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Definitions:

Conscious Memories

Memories that can be intentionally recalled, reflecting experiences we are aware of.

Limbic System

A complex system of nerves and networks in the brain, involving several areas near the edge of the cortex concerned with instinct and mood. It controls the basic emotions (fear, pleasure, anger) and drives (hunger, sex, dominance, care of offspring).

Forebrain

The anterior part of the brain, including the cerebrum and structures related to it, responsible for complex cognitive, sensory, and motor functions.

Cerebral Cortex

The outermost layer of the brain, involved in high-level functions such as sensory perception, cognition, and motor control.