Question: a)You overheard two students' conversation about pricing after a class: Student 1 - We can drop prices in the short run to cover differential variable

a)You overheard two students' conversation about pricing after a class: Student 1 - We can drop prices in the short run to cover differential variable and fixed costs. But in the long run, prices must cover all variable and fixed costs. Student 2 How is that possible? Shouldn't we always cover all our costs, short-term and long-term? Required: Write an appropriate response to clarify the pricing concept the students are discussing.

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