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Suedyso Suedyso
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4 years ago

Question 1.

Cost-plus pricing is a reasonable way to determine the optimal price when



▸

fixed cost and variable costs are roughly equal.



▸

fixed costs vary.



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fixed costs are high.



▸

marginal cost and average cost are roughly equal.



Question 2.

If demand is taken into account, firms that use cost-plus pricing can adjust price by



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raising markups on price-elastic goods and lowering markups on price-inelastic goods.



▸

letting sales fall, but hold the markup constant if demand falls.



▸

letting sales rise, but hold the markup constant if demand rises.



▸

lowering markups on price-elastic goods and raising markups on price-inelastic goods.

Textbook 
InMicro

InMicro


Edition: 1st
Authors:
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sarahlouhiggsarahlouhigg
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4 years ago
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Suedyso Author
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#2
4 years ago
Good timing, thanks!
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