Which of the Following Is an External Factor That Affects

question 118

Multiple Choice

Which of the following is an external factor that affects pricing decisions?

• A) The salaries of production management
• B) Competition
• C) The salaries of finance management
• D) Funds expensed to clean production equipment
• E) Research and development requirements

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Definitions:

Economies of Scale

Cost advantages reaped by companies when production becomes efficient, as the scale of the operation and output increases.

Coordination Problems

Challenges that arise in aligning the plans and actions of multiple parties in order to achieve a common goal or optimize outcomes.

Economic Profit

is the excess of total revenue over the total costs, including both explicit and implicit costs.

Accounting Profit

Accounting profit is the net income a company reports on its financial statements, calculated as total revenues minus explicit costs and depreciation.