Different firms in the same line of business are likely to use the same markup percent:
A) because they all want to have the same selling price.
B) because this is a government requirement.
C) because they are likely to have similar operating expenses.
D) because this is what is acceptable to manufacturers.
E) only if they are in pure competition.

Question

Quizplus · Accepted Answer

Firms in the same line of business are likely to have similar operating expenses, which would affect their pricing decisions. Therefore, they are likely to use the same markup percent to ensure that their prices cover their costs and allow for a reasonable profit margin. However, this is not a government requirement, nor is it necessarily dependent on manufacturers or only applicable in pure competition. Therefore, options A, B, D, and E are not accurate.

Different Firms in the Same Line of Business Are Likely