The practice of firms temporarily reducing prices in order to eliminate competition is called:
A. competitive pricing.
B. predatory pricing.
C. discount pricing.
D. strategic pricing.
Answer: B
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Other things being equal, the behavior of a monopolist differs from that of a competitive industry in that
A. the monopolist does not attempt to maximize economic profit. B. the monopolist must consider fixed costs in deciding the optimal level of output to produce in the short run. C. the monopolist hires more labor. D. the monopolist restricts output and hires less labor.
In the modern economic growth process, it is typical to find that:
A. Leader countries continue to grow faster than follower countries B. Follower countries can grow faster than leader countries C. Large countries cannot grow faster than leader countries D. The gap between the leader countries and the follower countries stays constant
The "demonstration effect" created by advertising: a. manipulates consumer needs for trivial products
b. creates urges among consumers to buy products previously unknown to them. c. conveys misleading claims to the consumer. d. none of the above
An increase in the reserve requirement from 20 percent to 25 percent is most likely to:
a. reduce total deposits in the banking system. b. reduce excess reserves and the deposit expansion multiplier. c. increase the money supply. d. reduce the amount of reserves required. e. increase total deposits and the deposit expansion multiplier.