In deciding whether to accept business at a special price, the short-run price should be set high enough to cover all variable costs and expenses.

Question

Quizplus · Accepted Answer

The short-run price should at least cover all variable costs and expenses to ensure that accepting the business will not result in losses. It is also important to consider the long-term implications of accepting business at a special price, such as potential damage to the company's brand and reputation if the lower price becomes the norm.

In Deciding Whether to Accept Business at a Special Price