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Cost-plus pricing
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==Economic theory== Cost-plus pricing is not common in markets that are (nearly) [[perfect competition|perfectly competitive]], for which prices and output are such that [[marginal cost]] (the cost of producing an additional unit) equals [[marginal revenue]]. In the long run, marginal and average costs (as for cost-plus) tend to converge, reducing the difference between the two strategies. It works well when a business is in need of short-term finance.
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