Under Which of the Following Situations Will Courts Usually Find

question 50

Multiple Choice

Under which of the following situations will courts usually find pricing legal?

• A) When the prices are above average variable cost but below average total cost and the company has excess capacity.
• B) When the prices are above average variable cost but below average total cost and the company does not have excess capacity.
• C) When the prices are below average variable cost and below average total cost and the company does not have excess capacity.
• D) Only when prices are above both average variable cost and average total cost.

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Definitions:

Budget Line

A visual chart showing all the potential pairs of two items that can be bought within a specific budget at unchanged prices.

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Budget Line

A graphical representation of all possible combinations of two goods that a consumer can purchase given their income and the prices of the goods.