In the long run,the practice of setting price so that it must at least equal the differential cost of producing and selling the product will cover all costs because
A)fixed costs are differential in the long run.
B)variable costs are differential in the long run.
C)fixed and variable costs are differential in the long run.
D)fixed and variable costs are discretionary in the long run.

Question

Quizplus · Accepted Answer

In the long run, both fixed and variable costs are considered differential costs because they can change based on the decisions made by the company, such as increasing production or entering new markets. Therefore, setting prices to cover these costs ensures all costs are covered over time.

In the Long Run,the Practice of Setting Price So That