Average-Cost Pricing

question 94

Multiple Choice

Average-cost pricing:

• A) May be very profitable if actual sales are higher than expected.
• B) May lose money for the firm if actual sales are less than expected.
• C) Does not take demand into account in setting prices.
• D) Is simple in theory but often fails in practice.
• E) All of these alternatives are correct.

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Definitions:

Abiding

Lasting a long time; enduring or continually recurring.

Morality

Principles concerning the distinction between right and wrong or good and bad behavior.

Justice

The principle of fairness and moral rightness that guides the administration of law and the treatment of individuals within a society.

Vast Majority

A term used to describe a significantly large portion of a group or quantity, often implying more than simple majority.