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stiks02 [169]
3 years ago
10

The big problem with average-cost pricing is that:A. fixed costs are hard to estimate.

Business
1 answer:
zavuch27 [327]3 years ago
6 0

Answer:

B. it ignores the firm's demand curve.

Explanation:

A: With the help of average cost pricing, the fixed cost can quickly estimate. Therefore, it cannot be the answer.

C: The average cost must consider the effect of variable cost. Therefore, it is also the wrong statement.

D: It is easy to estimate profit if there is an average cost pricing.

B: average-cost pricing always ignores the demand curve because it is a "U" shaped curve. Because after a certain level of product selling, the average cost is increasing. On the other hand, demand curve is such that if the price decreases, the quantity demanded increases. Therefore, it is a downward slopping curve. Hence, it is understood that, average-cost pricing ignores demand curve.

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There are different kinds of trade. Trading in foreign currency options would most likely be an appropriate hedging tool for individual investors who want to hedge the risk on specific U.S. exchange-listed stocks.

<h3>Currency option hedges</h3>

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An example, when an American importer is said to agree to buy some food equipment from a Chinese manufacturer at a later future date. The transaction will be carried out in Chinese currency.

The American importer has therefore made an hedge by buing currency options on the Chinese currency.

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Answer:

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Answer:

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