What is marginal cost pricing? Why is marginal cost pricing important?
What will be an ideal response?
Marginal cost pricing is a situation in which price equals the opportunity cost to society of producing one more unit of the good, which is the marginal cost of the good. It is efficient in the sense that it is impossible to increase the output of any good without lowering the value of the total output produced by the society as a whole.
You might also like to view...
Assume that one of two possible outcomes will follow a decision. One outcome yields a $75 payoff and has a probability of 0.3; the other outcome has a $125 payoff and has a probability of 0.7. In this case the expected value is
A) $85. B) $60. C) $110. D) $35.
When government spending exceeds tax revenues during a specific time period, this is known as a
A) government budget deficit. B) government budget surplus. C) balanced budget. D) public debt.
If marginal cost is greater than average total cost, average total cost:
A. is falling. B. is rising. C. will not change. D. is minimized.
What is the present value of $1,000 paid to you in six years if the interest rate is 9%? Work it out to the nearest cent.
What will be an ideal response?