Which statement is true with regards to differential pricing?
A)Only fixed costs become differential costs in the long run.
B)Both fixed and variable costs become differential costs in the long run.
C)Fixed costs are never differential costs.
D)When considering a special order all costs become differential costs.

Question

Quizplus · Accepted Answer

Differential pricing involves the use of different prices for the same product or service based on different costs. Both fixed and variable costs can become differential costs in the long run as they can vary across different products, regions, or customer groups. Option A is incorrect as it states that only fixed costs become differential costs which is not true. Option C is incorrect as fixed costs can become differential costs. Option D is incorrect as not all costs become differential costs when considering a special order.

Which Statement Is True with Regards to Differential Pricing