An incumbent firm uses limit pricing

A) to set price below a potential rival's marginal cost, thus making entry unprofitable.
B) to set one price for a quantity of a good below a certain limit, and a second price for purchases above the limit.
C) when it has no other advantages over a potential rival.
D) if it is limited in the quantity of inputs it can purchase to produce output.


A

Economics

You might also like to view...

Give an example of a monetary policy target. Explain why the Fed uses policy targets

What will be an ideal response?

Economics

The farm revolt (Populism) led ultimately to all of the following changes in society except

(a) Universal public education (b) Women's suffrage (c) Secret ballots (d) The vote for working men

Economics

Suppose the quantity demanded of ice cream cones increases from 400 to 425 cones a day when the price is reduced from $1.50 to $1.25. In this situation, the elasticity of demand, calculated using the average method, is

A) 3. B) 1. C) 0.33. D) 1.33.

Economics

By monitoring financial diaries of several of the world's poorest families, economists found that a challenge facing the poor was:

A. they did save any money to pay down debts. B. their income fluctuated a lot, in addition to being low. C. they often did not diversify their savings and had "their eggs all in one basket". D. All of these are true.

Economics