When Diversified Firms Use the Revenues from Profitable Businesses to Subsidize

question 44

Multiple Choice

When diversified firms use the revenues from profitable businesses to subsidize the operations of another business and then set the prices of the subsidized firm's products at a level that is below the subsidized business's cost to produce these items, this is known as ________ pricing.

• A) dynamic
• B) monopoly
• C) predatory
• D) beneficial

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Definitions:

Legislation

Laws or statutes that have been enacted by a governing body to regulate, authorize, sanction, grant, declare, or restrict various actions.

Royal Assent

The formal approval by a monarch to a bill that has passed both houses of parliament, turning it into law.

Firearms

Portable weapons that launch one or more projectiles driven by rapidly expanding high-pressure gas produced chemically by combustion or other means.

Legislation

Laws and statutes that have been formally enacted by a legislative body, which govern the actions of individuals and organizations within the jurisdiction.