A Firm Charges a Price Below Its Average Total Cost

question 356

Multiple Choice

A firm charges a price below its average total cost so that it drives out its competition. This is an example of

• A) a tie-in sale.
• B) duopoly pricing.
• C) price discrimination.
• D) predatory pricing.

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Definitions:

Demographic Transition

A theory about change over time from high birth and death rates to low birth and death rates, resulting in a stabilized population.

Industrial Revolution

The rapid transformation of social life resulting from the technological and economic developments that began with the assembly line, steam power, and urbanization.

Mortality Rates

A statistical measurement of the number of deaths in a particular population, scaled to the size of that population, per unit of time.

Life Expectancies

The average period that a person may expect to live, often used as a statistical measure in demographic studies.