Which of the Following Is True of Full-Cost Pricing

question 18

Multiple Choice

Which of the following is true of full-cost pricing?

• A) Full-cost pricing uses the marginal cost of a product as its base.
• B) Since fixed costs do not affect optimal price and quantity, full-cost pricing is error-prone.
• C) Firms that use full-cost pricing are producing at the optimum level of output.
• D) Full-cost pricing is based on the markup of price over average variable cost.
• E) Full-cost pricing takes into account the price elasticity of demand for the product.

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Definitions:

Inter Vivos Gift

A gift given by a living person to another which takes effect during their lifetime.

Intestate Distribution

The process of distributing a deceased person's assets according to state laws when they die without a valid will.

Intellectual Property

Rights arising from creation and innovation in the areas of industry, science, literature, and art.

Tangible Property

Physical assets and possessions that can be seen and touched, such as land, buildings, and personal property.