If a Dominant Firm Follows a Strategy of Limit Pricing

question 60

Multiple Choice

If a dominant firm follows a strategy of limit pricing, this firm charges a price _________ the current profit-maximizing level in order to _____________.

• A)equal to; maximize profits.
• B)below; reduce the rate of expansion by the fringe.
• C)above; drive out the fringe.
• D)below; limit dominant firm's marginal cost.

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Definitions:

Labor Market

The supply and demand for workers, where employees provide the labor and employers provide the wages or salary.

Crime Rates

The frequency of crimes occurring within a specific geographical area or population over a set period of time, often used as an indicator of social stability or unrest.

Behavior

The actions or reactions of an individual or group in response to external or internal stimuli.

Differential Association Theory

A sociological theory proposing that individuals learn deviant behavior from those close to them who provide models of and opportunities for deviance.