Because in many industries the cost of generating new ideas is so high, firms must charge a price ________ cost.

Question

Quizplus · Accepted Answer

In order to cover the cost of generating new ideas, firms must charge a price higher than the marginal cost. This ensures that the firm can earn enough revenue to offset the cost of research and development and make a profit. If the price charged was equal to or lower than the marginal cost, the firm would not be able to cover its costs and would not be able to sustain its operations.

Because in Many Industries the Cost of Generating New Ideas