A Firm Is Concerned That If It Lowers Its Prices

question 193

Multiple Choice

A firm is concerned that if it lowers its prices, its competitors will not only match its price cuts but may also retaliate by making even deeper cuts.This is referred to as:

• A)price wars.
• B)healthy competition.
• C)the capitalist system at work.
• D)unfair trade practices.

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Definitions:

Bad Debt

Money owed to a company that is unlikely to be paid by the debtor, often leading to the creditor writing it off as a loss.

Percentage of Sales

A method used to forecast financial figures, such as net income or expenses, based on a percentage of the sales volume.

Dishonored

Refers to a check or promissory note that has been refused by the bank on which it was drawn because of insufficient funds or other reasons.

Interest

The charge for the privilege of borrowing money, typically expressed as an annual percentage rate.