A Firm's Action to Set a Price Below Its Shutdown

question 73

Multiple Choice

A firm's action to set a price below its shutdown point with the intent to drive a competitor out of business is called

• A)hostile takeover.
• B)lowering the firm's price-cost margin.
• C)predatory pricing.
• D)price discrimination.
• E)a contestable market action.

---

Definitions:

Federal Budget

The estimated revenue and expenditure for a forthcoming fiscal year by the federal government.

Natural Environment

The physical, chemical, and biological factors and processes that occur naturally, including land, water, atmosphere, plants, and animals.

Aerospace Industry

A sector that deals with the development and manufacturing of flight vehicles, including aircraft, spacecraft, satellites, and their components.

Infrastructural Development

The construction and improvement of foundational facilities and systems, such as roads, bridges, and utilities, that are necessary for a society to function.