Which of the Following May Be Legal and Even Common

question 42

Multiple Choice

Which of the following may be legal and even common practice in a market economy?

• A) making the ability to buy one product conditional on also buying another
• B) bundling several products together and selling them as a package
• C) deterring new market entrants with short term predatory pricing
• D) selling product for less than the average variable cost of producing same.

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Definitions:

Production Possibility Frontier

A curve depicting the maximum attainable combinations of two or more products that a business can produce with limited resources.

Capital Goods

Long-lasting goods, such as equipment or buildings, used to produce other goods or services.

Consumer Goods

Products and services that are consumed by individuals or households to satisfy their needs or wants.

Command Economy

An economy in which a central government either directly or indirectly sets output targets, incomes, and prices.