A seller's cost structure affects price because, in the long run, the seller must price at a level that covers all variable costs of production, contributes to some portion of fixed costs, and contributes to some level of profit.

Question

Quizplus · Accepted Answer

A seller needs to cover all their costs and make a profit in order to stay in business in the long run. Therefore, the cost structure of the seller determines the minimum price they need to charge in order to achieve this goal.

A Seller's Cost Structure Affects Price Because, in the Long