Marginal cost pricing results in the most desirable mix of goods and services from the consumer's standpoint because
A)Firms are forced to produce at the most technically efficient output level.
B)Economic profits are zero.
C)Prices are forced down to the lowest possible level.
D)The prices consumers pay are a reflection of the value of the goods and services given up.

Question

Quizplus · Accepted Answer

Marginal cost pricing ensures that the prices consumers pay are a reflection of the value of goods and services given up. This means that consumers will be willing to pay exactly what the goods and services are worth to them, resulting in the most desirable mix of goods and services from the consumer's standpoint. Choices A and B may not necessarily result in the most desirable mix for consumers, and while marginal cost pricing may lead to lower prices (choice C), this is not its main objective.

Marginal Cost Pricing Results in the Most Desirable Mix of Goods