--%>
Assignment Help - homework help

Illustrates the role of cost in pricing

Illustrates the role of cost in pricing?

E

Expert

Verified

Mainly of the wholesale and retail organizations add several percentage of profit or mark up total cost per unit to attain at selling price. In words of Hall and Hitch, business firms under the conditions of monopolistic competitive and oligopoly market do not find out price and output with the assist of the principle MC=MR. They find out price and output on the basis of full average cost of production. Cost of production comprises fixed and variable costs. Under the short run the firm may not cover the fixed cost but this should cover at least variable cost. Under long run all costs should be covered.

If the whole cost is not recovered, the firm will acquire losses, and the firm should stop their production. Therefore costs provide the basis for pricing. When the cost raises price also increases. Cost shows a resistance point for lowering of price that is below that pricing should not be completed. Cost also find out the profit margin at different level of output.

   Related Questions in Managerial Economics

  • Q : Functions and responsibilities of

    States the functions and responsibilities of managerial economist?

    		•
  • Q : Charging the competitive price in the

    An apparent monopoly might charge the competitive price in the long run when: (w) exit is costly. (x) entry and exit are relatively costless. (y) this is not a natural monopoly. (z) this is not regulated.

    Q : State the laws of production State the

    State the laws of production.

    		•
  • Q : Increment in demand raises the

    An increase within the demand for Swiss cheese will absolutely raise the equilibrium as:  (w) price when the supply of Swiss cheese shrinks over the same period. (x) quantity when the supply of cheese shrinks during the same peri

    		•
  • Q : Problem on Occupational Crowding After

    After vacationing hundreds of restaurants, then a restaurant critic has concluded which in almost all the workers who clear tables and also wash dishes appear to be illegal aliens by Mexico. The critic has observed a phenomenon termed as: (1) marginalized labor. (2) t

    		•
  • Q : Illustrates the Expert Opinion method

    Illustrates the Expert Opinion method of Demand Forecasting?

    		•
  • Q : Determine market supply of labor The

    The market supply of labor is the sum of the: (1) quantities of labor supplied by households at each wage. (2) wages paid to households for each quantity supplied. (3) quantities demanded by firms at each wage. (4) marginal products of labor at each l

    		•
  • Q : Extension/contraction and shift in

    Differentiate between extension/contraction and shift in demand?

    		•
  • Q : Increases in orders for new capital A

    A change in a derived demand is best demonstrated while there are increases in: (1) sales of roasted peanuts during baseball season. (2) new car sales during economic downturns. (3) orders for new capital throughout economic booms. (4) beef prices when cowboys unioniz

    		•
  • Q : Explain the cost concepts briefly

    Explain the cost concepts briefly.

    		•