Selling a Product Below Cost with the Intent of Driving

question 24

Multiple Choice

Selling a product below cost with the intent of driving out a rival is known as:

• A) price discrimination.
• B) predatory pricing.
• C) exclusive dealings.
• D) tying sales.

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Definitions:

Utility Function

A representation in economics that shows the relationship between the utility (satisfaction) individuals receive from consuming goods and services and different consumption bundles.

Consumption

The action of using goods and services to satisfy needs or desires.

Income

Receipts from labor or investments, typically disbursed at regular intervals.

Consumption

The process by which goods and services are utilized to satisfy human wants, including the use of resources.