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:

Dominance

The state or condition of having control or authority over others, often in a social or economic setting.

Job Analysis

The process of studying and collecting information about the duties, responsibilities, necessary skills, outcomes, and work environment of a particular job.

Vertical Integration

A company's expansion by moving along its supply chain to control both production and distribution elements.

Leadership

The action of leading a group of people or an organization, or the ability to do this through vision, influence, and facilitating progress.