Which of the Following Observations About Government Regulation of Pricing

question 88

Multiple Choice

Which of the following observations about government regulation of pricing is true?

• A) Under most circumstances, price fixing is deemed legal.
• B) All types of price discrimination are always deemed illegal.
• C) All types of promotional pricing are legal.
• D) Price differences in quantity discounts due to cost differences are legal.

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Definitions:

Irrelevant Costs

Costs that should not influence decision-making because they will not change regardless of the outcome.

Sunk Costs

Past expenditures that have already been incurred and cannot be recovered or altered by current or future actions.

Decision Making

Selecting a course of action from competing alternatives.

Avoidable Cost

Costs that can be eliminated if a particular decision is made, such as discontinuing a product or service.