Which of the Following Would Not Help Facilitate Coordination of Pricing

question 18

Multiple Choice

Which of the following would not help facilitate coordination of pricing across firms in an industry?

• A)Predatory pricing
• B)Firms settling on round number price points and price increase increments
• C)Using a single industry multiplier across firms to give discounts
• D)Using a standard cycle for adjusting prices
• E)Collusion

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Definitions:

Put Option

A financial agreement granting the bearer the option, without being compelled, to offload a predetermined quantity of a fundamental asset at an agreed-upon price during a designated period.

Futures Contract

A contractual arrangement committing to the purchase or sale of a specific financial asset or commodity at an agreed price, set to occur at a future date.

Short-Sale

A trading strategy that involves selling borrowed securities with the expectation of buying them back at a lower price to profit from a decline in their value.

LIBOR

The London Interbank Offered Rate, previously a benchmark interest rate at which major global banks lend to one another.