When Firms Have Had to Defend Themselves Against the Charge

question 36

Multiple Choice

When firms have had to defend themselves against the charge that they have adopted unjustifiably low prices either to drive a competitor out of business or to prevent the entry of a rival, they have been accused of

• A)creating a trust.
• B)conspiracy.
• C)predatory pricing.
• D)price discrimination.

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Definitions:

Economic Downturn

a period of poor economic performance across a country or globally, characterized by reduced consumer spending, business investment, and employment.

Inferior Good

A type of good for which demand decreases as the income of consumers increases.

Perfect Substitutes

Identical products.

Complements

Goods or services that are consumed together because the use of one increases the value or demand for the other.