"When the average cost pricing by mode (ACM) rule is used, prices are equal to the sum of financial costs of that mode divided by its total volume"+ Is this pricing approach efficient? If yes, then explain why. If it is not efficient,+ what are major drawbacks of this pricing rule and how they can be corrected?-

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
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1
Proost (K.U. Leuven) and Van Dender (University of California at Irvine)
wrote in their 2003 paper:
"When the average cost pricing by mode (ACM) rule is used, prices are equal
to the sum of financial costs of that mode divided by its total volume"-
Is this pricing approach efficient? If yes, then explain why. If it is not efficient,
what are major drawbacks of this pricing rule and how they can be corrected?-
Transcribed Image Text:Proost (K.U. Leuven) and Van Dender (University of California at Irvine) wrote in their 2003 paper: "When the average cost pricing by mode (ACM) rule is used, prices are equal to the sum of financial costs of that mode divided by its total volume"- Is this pricing approach efficient? If yes, then explain why. If it is not efficient, what are major drawbacks of this pricing rule and how they can be corrected?-
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