In Using the Product Cost Concept of Applying the Cost-Plus

question 46

True/False

In using the product cost concept of applying the cost-plus approach to product pricing, selling expenses, administrative expenses, and profit are covered in the markup.

---

Definitions:

Free-Riding

The practice of benefitting from a good or service without paying for it or contributing to its provision, often discussed in the context of public goods.

Public Good

A product or service that is non-excludable and non-rivalrous, meaning its consumption by one individual does not reduce its availability to others.

Collective Willingness

The aggregated preference or desire of a group of individuals to support or buy into a particular idea, policy, or product.

Marginal Cost

The boost in complete costs associated with creating one more unit of a product or service.