A Firm That Charges a Very Low Price Would Be

question 136

Multiple Choice

A firm that charges a very low price would be practicing predatory pricing if

• A)the price allowed only a small profit.
• B)the price would only be profitable if it succeeded in driving a rival out of the market and prices increased afterward.
• C)the price allowed profits that were positive but below those earned by other firms.
• D)it only offered the low price to its rivals' customers.

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Definitions:

Novation

The act of replacing one party in a contract with another party, or altering the terms of a contract, with all parties' consent, resulting in a new agreement.

Material Breach

A significant violation of a contract that permits the other party to either compel performance, seek remedies for damages, or terminate the agreement.

Nonbreaching Party

The party in a contract who has not violated the agreement and may be entitled to legal remedies.

Obligations

Duties or actions that an individual or entity is legally required to perform according to the terms of a contract or law.