Pricing Practices

Marginal cost of producing output includes which of the following?

• Direct Labour

• Raw Material

• Direct expenses of the producer

• All of the above

Marginal Cost = Prime costs + ______________.

• Average Cost

• Total Fixed Cost

• Variable overheads

• Transfer price

The increase or decrease in the volume of production upto a certain extent influences only the _______________ whereas, the _________________ remain unaffected.

• Variable overheads; Fixed overheads

• Fixed Overheads; Variable Overheads

• Variable Overheads; Capital Accumulation

• Fixed Overheads; Depreciation costs

Under Marginal Cost Pricing, equilibrium output is determined where marginal cost equals _____________

• Total revenue

• Marginal revenue

• Total profit

• None of the above

Under the marginal cost pricing, Public undertakings producing essential to public goods may decide to charge a __________________ equal to MC.

• Higher price

• Price

• Lower price

• Total Profit

In case a public undertaking decides to produce commodities which are mainly purchased by higher income groups such as mineral water, petrol, services like air travel etc. and if the demand is assumed to be sufficiently large, the price can be _______________

• equal or lower than average cost

• equal to average cost

• equal or higher than average cost

• none of the above

In order to control monopoly or regulate the price charged by a monopoly firm, the government may impose a price based on ________________.

• Total Fixed Cost

• Total Variable Cost

• Total Cost

• Marginal Cost

Government introduces _________________________, in order to control monopoly or regulate the price charged by a monopoly firm.

• Price regulation

• Subsidies

• Tax incentives

• None of the above

Cost plus pricing is also known as ______________

• Marginal cost pricing

• Mark up pricing

• Transfer pricing

• None of the above

_________________________ is a pricing method where a fixed percentage is added on top of the cost to produce one unit of a product (unit cost) -the resulting number is the selling price of the product

• Transfer Pricing

• Marginal Cost Pricing

• Multi product pricing

• Cost plus pricing