Which Pricing Rule Generates the Greatest Welfare for Society

question 50

Multiple Choice

Which pricing rule generates the greatest welfare for society?

• A) marginal cost pricing rule
• B) average cost pricing rule
• C) total cost pricing rule
• D) fixed cost pricing rule
• E) variable cost pricing rule

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Definitions:

Preexisting Duty Rule

A principle in contract law that holds an existing duty does not constitute consideration for a new promise.

Unforeseen Circumstances

Events or conditions that could not have been reasonably anticipated and that may affect the performance of contractual obligations.

Ethical

Pertaining to or dealing with morals, the principles of morality concerning right and wrong or good and bad behavior.

Illusory Promise

A statement that appears to be a promise but is too vague or lacks commitment to be legally binding and enforceable as a contract.