The marginal cost method considers the direct costs of producing and selling products for export as the floor beneath which prices cannot be set.

Question

Quizplus · Accepted Answer

The marginal cost method is a pricing strategy that sets the price of a product based on the direct costs associated with producing and selling it. The idea is to set a price that is higher than the marginal cost in order to cover other indirect costs and generate a profit. Therefore, the direct costs of production and export set a floor beneath which prices cannot be set, according to the marginal cost method.

The Marginal Cost Method Considers the Direct Costs of Producing