Consider the following statements regarding the economic pricing model:
I. The economic model is limited in use because a firm's demand curve is difficult to determine.
II. The marginal revenue and marginal cost model is valid for all forms of market organization (perfect competition, oligopoly, and so forth).
III. Cost accounting systems are not designed to measure the marginal changes in cost incurred as production and sales increase.
Which of the above statements is (are) true?
A) I only.
B) III only.
C) I and III.
D) II and III.
E) I, II, and III.

Question

Quizplus · Accepted Answer

Statement I is true because determining a firm's demand curve can be complex and challenging. Statement III is true because traditional cost accounting systems often do not focus on measuring marginal costs. Statement II is false because the marginal revenue and marginal cost model is not applicable in all market structures, such as perfect competition where firms are price takers.

Consider the Following Statements Regarding the Economic Pricing Model