If price is set as average total cost plus a markup, the price will be above the average total cost.

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Multiple Choice

If price is set as average total cost plus a markup, the price will be above the average total cost.

Explanation:
In cost-plus pricing you take the average total cost per unit and add a markup to determine the selling price. Since a markup is a positive amount, the price becomes ATC plus that positive amount, which is strictly greater than ATC. (Only if the markup were zero would the price equal ATC, but with a positive markup the price is above it.) So the statement is true.

In cost-plus pricing you take the average total cost per unit and add a markup to determine the selling price. Since a markup is a positive amount, the price becomes ATC plus that positive amount, which is strictly greater than ATC. (Only if the markup were zero would the price equal ATC, but with a positive markup the price is above it.) So the statement is true.

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