Average-Cost Pricing Will Result in Larger Than Expected Profit

Multiple Choice

Average-cost pricing will result in larger than expected profit:

A) most of the time.
B) if the average fixed cost estimate is based on a quantity that is smaller than the actual quantity sold.
C) if the average total cost is higher than expected.
D) only if the manager makes arithmetic errors in computing average variable cost.
E) None of the above is correct.