Regulators Employ Average Cost Pricing Instead of Marginal Cost Pricing

question 192

Multiple Choice

Regulators employ average cost pricing instead of marginal cost pricing because

• A) average cost pricing is more efficient than marginal cost pricing.
• B) price must be high enough to cover all opportunity costs if the firm is to stay in business.
• C) the price is lower with average cost pricing.
• D) average cost pricing is simpler to compute than marginal cost pricing.

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Definitions:

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A freight system where trailers are transported on railway flatcars, combining road and rail transportation.

Containers On Marine Vessel (COMV)

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Just-In-Time System

A supply chain management system designed to decrease waste and increase efficiency by receiving goods only as they are needed in the production process.

Same Day Air

A transportation service ensuring parcels or freight are delivered via air transport within the same day, emphasizing speed and efficiency.