The Simple Form of the "Theory of Limit Pricing" Postulates

question 43

Multiple Choice

The simple form of the "theory of limit pricing" postulates that:

• A)A firm in a strong market position can obscure superior performance by limiting the release of information about prices
• B)A firm always tries to limit price increases to what its customers can afford
• C)There is a natural and objective limit to prices, imposed by the market
• D)A firm in a strong market position sets prices at a level that dissuades entrants from entering

---

Definitions:

Productivity

A measure of efficiency that calculates the amount of output produced per unit of input, often used to gauge the effectiveness of labor, machinery, and processes.

Process Layout

An arrangement of production where workstations or departments are grouped by function to perform similar activities, optimizing for flexibility rather than efficiency.

Flexibility

The ability to adapt to new, different, or changing requirements, environments, or conditions in a responsive and effective manner.

Product Layout

A way to arrange a manufacturing business by placing equipment in an assembly line.