Sky-High Skywriters Temporarily Reduces Its Price When a New Firm

question 109

Multiple Choice

Sky-High Skywriters temporarily reduces its price when a new firm called The Sky's the Limit Skywriting enters the industry.Sky-High Skywriters is practicing

• A)Retaliation.
• B)Price leadership.
• C)Predatory pricing.
• D)Cartel pricing.

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Definitions:

Preemptive Right

The right granted to existing shareholders to purchase additional shares before the company offers them to the public, to maintain their proportional ownership.

Stock-split Right

The entitlement of a shareholder to receive additional shares when a company decides to divide its existing shares into multiple ones to boost liquidity.