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According to the text, cost-plus pricing is focused internally and does not take into account external market realities.
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- Which of the following is NOT mentioned in the text as an advantage of cost-plus pricing systems?a.) They are legally acceptable and in certain cases may be required.b.) If sales are made, they should be profitable with this pricing method.c.) Assuming costs are known, the pricing task is simple.d.) Prices are matched to market realities.
- In the long run, each firm in a perfectly competitive industry will:a. increase its priceb. differentiate its goodsc. produce where MR is greater than MCd. earn only enough to cover the opportunity costs of the resources used in production
- If a monopoly is forced to charge a price equal to marginal cost:a. output wil fallb. consumer surplus will decreasec. other firms will enter the industryd. the deadweight loss will decrease