Under the Marginal cost pricing, the price is determined on the basis of the variable cost. So, the correct answer is B. Variable cost.

Here's why:

1. Marginal cost refers to the cost of producing one additional unit of a product.

2. This cost is directly related to variable costs, which are costs that change with the level of output in production. Examples of variable costs include raw materials, direct labor costs, and utilities used in the production process.

3. Therefore, under marginal cost pricing, a company would set the price of its product equal to the variable cost of producing an additional unit.

4. This pricing strategy does not take into account fixed costs (costs that do not change with the level of output), total costs (the sum of fixed and variable costs), or average costs (total costs divided by the number of units produced).

So, the price under marginal cost pricing is determined by the variable cost.

Question

Under the Marginal cost pricing, the price is determined on the basis of the variable cost. So, the correct answer is B. Variable cost.

Here's why:

1. Marginal cost refers to the cost of producing one additional unit of a product.

2. This cost is directly related to variable costs, which are costs that change with the level of output in production. Examples of variable costs include raw materials, direct labor costs, and utilities used in the production process.

3. Therefore, under marginal cost pricing, a company would set the price of its product equal to the variable cost of producing an additional unit.

4. This pricing strategy does not take into account fixed costs (costs that do not change with the level of output), total costs (the sum of fixed and variable costs), or average costs (total costs divided by the number of units produced).

So, the price under marginal cost pricing is determined by the variable cost.

Knowee AI · Accepted Answer

Under the Marginal cost pricing, the price is determined on the basis of the variable cost. So, the correct answer is B. Variable cost.

Here's why:

1. Marginal cost refers to the cost of producing one additional unit of a product.

2. This cost is directly related to variable costs, which are costs that change with the level of output in production. Examples of variable costs include raw materials, direct labor costs, and utilities used in the production process.

3. Therefore, under marginal cost pricing, a company would set the price of its product equal to the variable cost of producing an additional unit.

4. This pricing strategy does not take into account fixed costs (costs that do not change with the level of output), total costs (the sum of fixed and variable costs), or average costs (total costs divided by the number of units produced).

So, the price under marginal cost pricing is determined by the variable cost.

Under the Marginal cost pricing, the price is determined on the basis of; A. Fixed cost B. Variable cost C. Total cost D. Average cost

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