Cost-plus pricing is a reasonable way to determine the optimal price when
A)marginal cost and average cost are roughly equal.
B)fixed cost and variable costs are roughly equal.
C)fixed costs vary.
D)fixed costs are high.

Question

Quizplus · Accepted Answer

Cost-plus pricing is based on adding a markup percentage to the cost of producing the product. When marginal cost and average cost are roughly equal, it means that the cost of producing each additional unit is not significantly different than the overall cost, indicating that cost-plus pricing would be an appropriate strategy.

Cost-Plus Pricing Is a Reasonable Way to Determine the Optimal