Distinguish between predatory pricing strategy and bundling strategy.
What will be an ideal response?
Predatory pricing is pricing that threatens to keep a competitor out of the market. It is a price that is so low that it will be profitable for the firm that adopts it only if a rival is driven from the market. There is also the possibility that the predatory firm could raise prices to monopoly levels after the rival was driven out.
Bundling refers to a pricing arrangement under which the supplier offers substantial discounts to customers if they buy several of the firm’s products, so that the price of the bundle of products is less than the sum of the prices of the products if they were bought separately.
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What happens to wage and rental rate according to the Heckscher-Ohlin model if the price of a good that uses capital extensively increases by 6%?
a. Both wage and rental rate decrease by 6%. b. Both wage and rental rate increase by less than 6%. c. Both wage and rental rate increase by more than 6%. d. Wage rate increases by more than 6% but rental rate decreases. e. Wage rate decreases but rental rate increases more than 6%.
In the foreign exchange market, an increase in the exchange rate leads to
A) an increase in the quantity of dollars demanded and no movement along the demand curve for dollars. B) an increase the quantity of dollars supplied and a movement along the supply curve of dollars. C) an increase the quantity of dollars supplied and no movement along the supply curve of dollars. D) a decrease the quantity of dollars supplied and a movement along the supply curve of dollars. E) an increase in the quantity of dollars demanded and a movement along the demand curve for dollars.
His analysis started with the recognition that the total quantity demanded of an economy's output was the sum of four types of spending: consumer expenditure, planned investment spending, government spending, and net exports
A) John Maynard Keynes B) Sir John Hicks C) Milton Friedman D) Paul A. Samuelson
What does limited liability mean?
A) The owners of the business are personally responsible for paying expenses incurred by the business. B) Only employees can have a claim on the assets of the business. C) The personal assets of the owners cannot be used to pay the firm's debts if the business is bankrupt. D) Anybody with a liability against a firm can claim only what their liability refers to.