Price is not:
A) the revenue per unit.
B) greater than cost in order for the firm to earn income.
C) the same as cost.
D) the same as cost per unit plus the income per unit.

Question

Quizplus · Accepted Answer

Price is the amount a buyer pays to the seller for a product or service, and it is not the same as cost, which is the expenses incurred by a firm in producing and selling a product or service. Price may be higher or lower than cost, depending on the competitive environment, supply and demand, and other market factors. The revenue per unit (A) and the income per unit (D) are related to price and cost but not identical to them. And while it is true that the firm needs to earn more revenue than cost to be profitable (B), this statement does not capture the distinction between price and cost.

Price Is Not