Management wants to offer a "Thank You" sale to its customers by offering to sell additional units of a product at the lowest price possible without affecting their profits. The price management charges for these one-time sale units should be set equal to the:
A) Average variable cost.
B) Average total cost.
C) Average total revenue.
D) Marginal revenue.
E) Marginal cost.

Question

Quizplus · Accepted Answer

To maintain profitability while offering a sale, the price should be set equal to the marginal cost. This ensures that the cost of producing one more unit is covered, without affecting overall profits.

Management Wants to Offer a "Thank You" Sale to Its