When an Oligopoly Reduces Its Price with the Intent of Driving

question 9

Multiple Choice

When an oligopoly reduces its price with the intent of driving away its competitors, it is said to be engaging in

• A) price discrimination.
• B) pricing differentials.
• C) price fixing.
• D) predatory pricing.
• E) a price-tying agreement.

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Definitions:

John Ehrlichman

A key advisor and assistant to President Richard Nixon, primarily involved in domestic affairs and later linked to the Watergate scandal.

Plumbers

Individuals skilled in installing and maintaining systems used for potable (drinking) water, sewage, and drainage in plumbing systems; also refers to a covert White House Special Investigations Unit during the Nixon administration.

Daniel Ellsberg

A former United States military analyst who, during the Vietnam War, released the Pentagon Papers, a top-secret Department of Defense study of U.S. political and military involvement in Vietnam, to the public.

South Vietnamese President

The head of state of South Vietnam, officially known as the Republic of Vietnam, during its existence from 1955 until its fall to North Vietnam in 1975.