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True or false A price fixed below the equilibrium price of a product will cause a shortage of that product?
true
Suppose the selling price drops from 50 to 45 per unit and the variable and fixed costs remain constant what would be the beak even point in units or shillings?
If there is a drop in sales price without relevant drop in variable cost as well as fixed cost then it will cause breakeven point to rise because now single unit of product is earning less contribution towards fixed assets.
In presenting the idea of a demand curve economists presume that the most important variable in determining the quantity demanded is the price of the product itself or consumer income?
The price of the product itself.
Adding a standard mark up to the cost of the product refers to?
adding a standard mark up to the cost of the product is adding a "fixed" rate of percentage over the cost to "price" the product. in another word, by doing this all products' selling price has a fixed gross profit over their cost.
Which type of contract addresses situations when the exact product or service cannot be determined?
fixed-celling price with retroactive price redetermination
Why is determining demand elasticity important in economics?
What are the determined factors of price elasticity of demand
Are fixed costs always irrelevant?
No fixed costs are not always irrelevant. Some fixed costs may differ among the alternatives and hence will be relevant. e.g. When figuring the incremental cost of the more expensive car, the relevant costs would be the purchase price of the new car (net of the resale value of the old car) and the increases in the fixed costs of insurance and automobile tax and license.
Can any person sell any product more than maximum retail price fixed by the publisher?
no no one can sell more than that of the maximum retail price.
What factors affect pricing when determining a new selling price?
· The cost of production · The market demand for the product · The desired markup by the business owner
Why might it be misleading to show the fixed costs per unit basis?
When you show fixed cost on a per unit basis, the cost of each product will be significantly higher. This will give the false impression that the price of the product will need to be high in order to make a profit.
How cost accounting helps the firm in determining the selling price?
Cost accounting helps a company know how much an item cost a company. The company can then add the cost they need to make to the product, usually done as a percentage.
How is relevant costing useful in determining the good business decision making?
Relevant costing is important to good business decision making because it allows a company to price their goods and services for maximum sales. Without the ability to make sales, no business will survive.
