Consider the Following Statements About Why Prices Are Often Based

question 42

Multiple Choice

Consider the following statements about why prices are often based on product costs:
I. Companies sell many products and services, and cost-based approaches provide a simple and direct pricing method.
II. The cost of a product or service provides a lower limit or floor, below which price should not be set in the long run.
III. Determining a company's demand and marginal revenue curves is difficult, costly, and time consuming.
Which of the above statements is (are) true?

• A) I only.
• B) III only.
• C) I and III.
• D) II and III.
• E) I, II, and III.

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Definitions:

Consumer Credit

A type of personal loan extended to individuals to purchase consumer goods and services.

Student Loans

Funds borrowed by students to cover education-related expenses, which must be repaid with interest over time.

Pre-Judgment Attachment

A legal mechanism allowing a creditor to hold or seize a debtor's assets before the final resolution of a lawsuit, ensuring the assets remain available to satisfy a future judgment.

Seize

To take hold of suddenly and forcibly; in legal terms, it often refers to the act of taking property by authority of law.