Which of the following is true of price?
A) Price must be greater than cost for a firm to earn income.
B) Price is the difference between gross margin and the cost of goods sold.
C) Price is a dollar measure of the resources used to achieve a given benefit.
D) Price is the difference between cost per unit and income per unit.

Question

Quizplus · Accepted Answer

Price must be set at a level higher than cost in order for the firm to earn a profit or income. This ensures that the revenue generated from sales is greater than the amount spent on producing the product or providing the service. Option B is incorrect, as gross margin is a percentage measure, not a monetary figure. Option C may describe the concept of cost-benefit analysis, but it does not relate directly to price. Option D is incorrect, as income per unit is not a relevant factor in determining price.

Which of the Following Is True of Price