Would it ever make sense for a firm to charge a price at or below the cost of the product?

What will be an ideal response?


This might be an example of penetration pricing in which the firm is trying to gain market share. (Two other reasons not discussed in the text: limit pricing to prevent entry, and predatory pricing to drive out rivals.)

Economics

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Before 1980, most U.S. corporations raised funds

A) in U.S. stock and bond markets or in foreign capital markets. B) in U.S. banks or in foreign capital markets. C) in U.S. stock and bond markets or in U.S. banks. D) in U.S. and foreign banks.

Economics

Colonialists tried to attract precious metals and coins by raising or attempting to raise the colonial price of the foreign money. This is called devaluation

Indicate whether the statement is true or false

Economics

After an extended period of steady inflation at a constant rate,

a. people will anticipate inflation. b. actual unemployment will approximate the natural rate of unemployment. c. actual unemployment will be less than the natural rate of unemployment. d. both a and b are true.

Economics

The profit maximizing output level for a perfectly competitive firm is always where

A. P = AVC. B. MC = ATC. C. MC = AVC. D. P = MC.

Economics