Establishing Prices That Will Generate the Necessary Profits Means That

question 49

True/False

Establishing prices that will generate the necessary profits means that business owners must understand how much it costs to make, market, and deliver their products and services.

---

Definitions:

Market Price

The price of a commodity when sold in a competitive marketplace, determined by the supply and demand for the commodity.

Profit

The financial gain realized when the revenue generated from business activities exceeds the expenses, costs, and taxes needed to sustain the business.

Short-Run

A period in which at least one factor of production is considered fixed, affecting the ability of businesses to change production levels.

Marginal Cost Curve

A graphical representation showing how the cost of producing one more unit of a good varies with the level of production.