Which of the Following Is False Regarding the Practice of Limit

question 56

Multiple Choice

Which of the following is false regarding the practice of limit pricing by a dominant firm?

• A)Limit pricing is a strategy to keep price below the level that maximizes profit to reduce the number of firms entering the fringe.
• B)Limit pricing is a strategy that sacrifices current profits to maintain higher future profits.
• C)Limit pricing is most appealing when the dominant firm has a cost advantage over the fringe firms.
• D)Limit pricing is most attractive to a dominant firm that is more interested in current profits than future profits.

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Definitions:

Cost of Healthcare

The total expenses associated with medical services, treatments, and procedures delivered to individuals or populations.

Consumer Demand

The desire and willingness of consumers to purchase goods or services at a given price over a certain time period.

Providing Care

The act or process of offering or delivering health services and support to individuals in need of medical, physical, or emotional assistance.

Managed Care

A healthcare delivery system aimed at managing cost, quality, and utilization of services by implementing mechanisms such as provider networks and pre-authorization.