The Practice of a Firm Setting a Price So Low

question 46

Multiple Choice

The practice of a firm setting a price so low that all firms incur losses is called

• A) a tournament.
• B) predatory pricing.
• C) a buy-out strategy.
• D) a contestable market.

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Definitions:

Overjustification Effect

The phenomenon in which rewarding a person for performing an activity actually decreases their intrinsic motivation to perform that activity.

Externality Hypothesis

A theory suggesting that individuals attribute their success to internal factors and failures to external factors, often explored within the context of social psychology and self-perception.

Principle Homeostasis

The regulatory principle that organisms maintain a stable internal environment despite external changes.

Hierarchy Needs

A theory in psychology, proposed by Abraham Maslow, suggesting that people are motivated by five basic categories of needs: physiological, safety, love/belonging, esteem, and self-actualization, which form a hierarchy.