Which of the Following Reasons Would Cause a Company to Reject

question 128

Multiple Choice

Which of the following reasons would cause a company to reject an offer to accept business at a special price?

• A) The additional sale will not conflict with regular sales.
• B) The additional sales will increase differential income.
• C) The additional sales will not increase fixed expenses.
• D) The additional sales will increase fixed expenses.

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Definitions:

Fair-Return Price

For natural monopolies subject to rate (price) regulation, the price that would allow the regulated monopoly to earn a normal profit; a price equal to average total cost.

Allocatively Efficient

A state of resource allocation in which it is impossible to make any one individual better off without making someone else worse off.

Socially Optimal Price

The price of a good or service that reflects the external costs and benefits to society, aiming to achieve the most efficient allocation of resources.

Big Data

Extremely large data sets that may be analyzed computationally to reveal patterns, trends, and associations, especially relating to human behavior and interactions.