Which of the Following Are True Regarding Long-run Pricing Decisions

The long run average cost curve makes the assumption that the firm has selected the best factor mix possible in terms of the production of outputs. The product lines total fixed costs are less than the contribution margin lost from dropping the product line c.

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Special order decisions are long-rundecisions.

. Reducing the need to change cost structures frequently. D average total cost is minimized. A value chain management B enterprise resource planning C cost management D customer value management.

A minimizing the need to monitor competitors prices frequently B reducing the need to change cost structures frequently. Price in the long run is not usually equal to minimum average total cost. In the decision on whether or not to drop an unprofitable product line the product line will most likely be dropped if.

For long-run pricing decisions using stable prices has the advantage of. Ii and iii D. 11 Which of the following is FALSE regarding the long run for a firm in monopolistic competition.

A Efficiency wages may hold wages below the equilibrium level. AMarginal cost equals average total cost. Obviously cost needs to be one of your first considerations when making pricing decisions.

Whether or not the company has excess capacity is seldom a consideration for special order decisions. All of the given answers i. Monopolistic competition is a market structure in which few firms sell similar products.

B the markup is equal to zero. It is true that the long run average cost curve is comprised of all the lowest points of each of the short run average cost curves because no firm will operate at a level of higher per-unit costs in the long run than in the short run. No business can sustain itself when costs exceed sales.

The sales price of a special order should never be below the priceoffered to regular customers. A balance of market forces and cost is important when making pricing decisions. Lets say that the products demand increases and with that the market price goes up.

Conversely firms will react to losses in the long run through a process of exit in which existing firms reduce output or cease production altogether. For long-run pricing decisions using stable prices has the advantage of a. C Prices may be sticky downwards in some markets because consumers prefer stable prices.

All of the product lines fixed costs are unavoidable b. In the long run a monopolist can earn only normal profits. No firm has the incentive to enter or leave the market.

Prices are based on costs subject to the constraint that customers and competitors will exert an influence. 34 In monopolistic competition in the long run firms produce. The market is in long-run equilibrium where all firms earn zero economic profits producing the output level where P MR MC and P AC.

11 12 Which one of the following statements is TRUE for BOTH perfect competition and. In a perfectly competitive market long-run equilibrium will occur when the marginal costs of production equal the average costs of production which also equals marginal revenue from selling the goods. 33 In the long run monopolistically competitive firms produce where.

In the long run firms will respond to profits through a process of entry where existing firms expand output and new firms enter the market. A minimizing the need to monitor competitors prices frequently. So the equilibrium will be set graphically at a three-way intersection between the demand marginal cost and average total cost curves.

B reducing the need to change cost structures frequently. BPrice equals average total cost. The simplest pricing models use a cost plus approach in which you add a standard percentage to your costs to determine your price.

D Prices may be sticky downwards in some markets because consumers may judge. For long-run pricing decisions using stable prices has the advantage of _____. D helping to build buyer-seller relationships.

This will guarantee profitability as long as you maintain. Similar to firms in perfectly competitive markets firms in monopolistically competitive markets can enter and exit the market without restriction so profits are driven to zero in the long run. Monopolistic Competition ch.

Minimizing the need to monitor competitors prices frequently. 20 The approaches and activities of managers in short-run and long-run planning and control decisions that increase value for customers and lower costs of products and services are known as. A excess capacity exists.

A It starts with a target price which is the estimated price for a. Which of the following statements is true regarding cost-plus pricing. B Workers may resist wage cuts which reduce their wages below those paid to other workers in the same occupation.

Key Concepts and Summary. A monopolist will always make economic profit in. Prices are determined by the market subject to the constraint that costs must be covered in the long run.

Helping build buyer-seller relationships. C the demand curve has shifted so that it intersects the minimum average total cost point. Both quantitative and qualitative impacts should beconsidered0 1.

DThe firms economic profit equals zero. C reducing competition. The contribution margin lost from dropping the product line is less than the fixed costs avoided.

2 Which of the following would not be a factor in the. CPrice exceeds marginal cost.

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