A big problem with fair pricing schemes is that
A) output is lower than if the market were competitive
B) prices are higher than if the market were competitive
C) firms have no incentive to control costs
D) efficiencies result from lack of profit motive
E) the marginal cost may not be very low

Question

Quizplus · Accepted Answer

Fair pricing schemes often lead to a lack of incentive for firms to control costs because they are guaranteed a certain price or profit, reducing the motivation to minimize expenses and improve efficiency.

A Big Problem with Fair Pricing Schemes Is That