A Pricing Strategy Below Cost Is Often Claimed to Be

question 9

Multiple Choice

A pricing strategy below cost is often claimed to be ________, done to drive rivals out of business so that the firm can subsequently raise its price back up to the monopoly level.

• A)predatory
• B)fair
• C)ethical
• D)None of the above is correct.

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Definitions:

Condition Precedent

A condition in a contract that must be met before a party's promise becomes absolute.

Avoidable

Capable of being prevented or circumvented through careful action or strategic planning.

Collateral Agreement

An agreement that has its own consideration, but supports another agreement.

Breach of the Contract

An occurrence when one or more parties involved in a contract fail to fulfill their legal obligations as stipulated within the contract.