In the Long Run,the Practice of Setting Price So That

question 137

Multiple Choice

In the long run,the practice of setting price so that it must at least equal the differential cost of producing and selling the product will cover all costs because

• A)fixed costs are differential in the long run.
• B)variable costs are differential in the long run.
• C)fixed and variable costs are differential in the long run.
• D)fixed and variable costs are discretionary in the long run.

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Definitions:

Expected Utility

A theory in economics that calculates the utility of an outcome based on its probability and the utility of the outcomes.

Income

The monetary payment received for goods or services, or profit from investments, typically calculated on a regular basis like annually or monthly.

Expected Utility Function

A mathematical expression that represents an individual's preferences over a set of outcomes, incorporating the probabilities of those outcomes.

Sure Payment

A guaranteed payment or financial transaction that is certain to occur.