When does the marginal cost decrease?
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.”
When does the marginal cost decrease?
Marginal cost is nothing but the change in the overall cost that emerges when the quantity manufactured is increased by one unit, this means marginal cost refers to the cost of manufacturing one additional unit of a product. The marginal cost curve typically makes the U-shaped graphical diagram, this is because initially when an organization increases its output, the variable cost along with the total cost start increase at the diminishing rate.
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