An Incumbent Firm Uses Limit Pricing

question 47

Multiple Choice

An incumbent firm uses limit pricing

• A)to set price below a potential rival's marginal cost, thus making entry unprofitable.
• B)to set one price for a quantity of a good below a certain limit, and a second price for purchases above the limit.
• C)when it has no other advantages over a potential rival.
• D)if it is limited in the quantity of inputs it can purchase to produce output.

---

Definitions:

Small Sample Size

In research, refers to a study or experiment that is conducted with a number of participants or cases that is considered insufficient to produce statistically significant results.

Self-Actualization Theory

A concept in psychological theory, particularly in humanistic psychology, positing that the ultimate goal of life is to achieve one's full potential and self-fulfillment.

Existence of Evil

The presence and influence of morally bad or harmful actions, intentions, or circumstances in the world.

Metaneeds

In Abraham Maslow's hierarchy of needs, these are the highest-level needs, involving self-actualization and the realization of one's potential.