Suppose the military bureaucracy consistently misinforms Congress on the total costs of producing military hardware. Assume that it underestimates the actual costs and that the political representatives believe these estimates. Show how this is likely to cause a loss in efficiency. Show the efficient output of military hardware, the output desired by the military bureaucracy, and how the output chosen will differ from the efficient output even if Congress attempts to achieve efficiency. In your answer, assume that the military seeks to maximize the size of its budget
Customary Pricing
There are various types of pricing strategies followed in the market. They are psychological pricing, odd pricing, free onboard pricing, customary pricing, prestige pricing, dual pricing, ruling pricing, negotiated pricing, mark up pricing, etc. each one can be explained as follows:
Multiple Unit Pricing
“Multiple-unit pricing is a practice where a company offers consumers a lower than unit price if a specified number of units are purchased.”
Suppose the military bureaucracy consistently misinforms Congress on the total costs of producing military
hardware. Assume that it underestimates the actual costs and that the political representatives believe
these estimates. Show how this is likely to cause a loss in efficiency. Show the efficient output of military
hardware, the output desired by the military bureaucracy, and how the output chosen will differ from the efficient output even if Congress attempts to
achieve efficiency. In your answer, assume that the military seeks to maximize the size of its budget.
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