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Author Question: The cost-plus-markup theory is an inadequate explanation of relative prices because A) it does ... (Read 15 times)

WWatsford

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on: Jun 29, 2018
The cost-plus-markup theory is an inadequate explanation of relative prices because
 
  A) it does not explain why there is a standard percentage markup in most industries.
  B) it is too simple, and simple theories are rarely as useful as more complex theories.
  C) the theory is inconsistent with observable relationships between marginal costs and prices.
  D) people who actually set prices do not describe the process as cost-plus.

Question 2

Refer to the figure above. What is the price effect of a price reduction from 6 to 4?
 
  A) 300
  B) 600
  C) 900
  D) 1,200


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ladyjames123

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Reply #1 on: Jun 29, 2018
Answer to Question 1

C

Answer to Question 2

B


WWatsford

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Reply 2 on: Jun 29, 2018
Gracias!

AngeliqueG

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Reply 3 on: Yesterday
Great answer, keep it coming :)

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