Question

Under average-cost pricing, the government will raise the price of output whenever a firm's costs increase, and lower the price whenever a firm's costs decrease. over time, under the average-cost pricing policy, what will the local cable company most likely do?

Answer 1

The local cable company will most likely allow its own costs to increase. Under this average-cost pricing policy, when the local cable company's costs increase, the price of output will also be raised. This means that there will be more means for business for the local cable company, which is beneficial long-term.

Answer 2

Local cable companies will adjust prices according to market prices, even if prices go up, it will greatly benefit local cable companies in the long run.

Further Explanation

Price policy, also known as pricing policy, is a decision about pricing the goods or services sold that management takes. Price is one part that can be used as a tool to influence consumers, in addition to ways of distribution and promotion, and products. Prices are influenced by profits achieved, demand for goods or services marketed, production costs, and specific objectives to be achieved by the company.

Pricing

In setting prices, companies only suppress one factor from various factors that need to be considered, for example suppressing factors of production without regard to other factors.

• Orientation on the cost of goods. Some companies set prices based on basic prices. The base price includes all costs and sometimes also the general costs allocated.
• Markup and price plus fees. Both ways to determine this price by adding a certain percentage of the base price per unit. Markup prices are usually used by retailers. Meanwhile, cost-plus is usually used for products that are difficult to determine the basic price before the product is finished, such as construction work.
• Pricing based on the target. This determination is usually used by manufacturing industry companies. The company determines the price that will provide a certain return on investment and a certain level of production. For example, the General Motor company publicly stated that the price of their production cars was set so that a return of investment of 15 to 20% was obtained.

Based on the target pricing procedure are as follows: 1) estimate the variable cost per product unit, for example, product A, at Rp 10,000. 2) determine the estimated number of A unit products sold, for example, 500,000 units. 3) estimate the fixed costs to produce the product.

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definition of Price policy brainly.com/question/7257273

definition of Pricing brainly.com/question/7257273

Details

Grade: High School

Subject: Business

keywords: Price policy