how is average cost pricing different from marginal cost pricing?

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  • Oiy
    Lv 5
    2 months ago

    Marginal cost pricing means that the price is set above the variable cost, or above the shutdown point. Average cost pricing means that the price is set at the level that is needed for the business to go on. At one point both prices will be equal because MC will equal ATC at the breakeven point.

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