In Which of the Following Scenarios Would a Predatory Pricing

question 62

Multiple Choice

In which of the following scenarios would a predatory pricing scheme have the greatest chance of success,all else constant?

• A)The predatory price is set well below cost, many rivals are likely to enter after the strategy ends, and profits can be recouped only over a relatively long period of time.
• B)The predatory price is set well below cost, relatively few rivals are likely to enter after the strategy ends, and profits can be recouped in a relatively long period of time.
• C)The predatory price is set just below cost, many rivals are likely to enter after the strategy ends, and profits can be recouped in a moderate period of time.
• D)The predatory price is set just below cost, relatively few rivals are likely to enter after the strategy ends, and profits can be recouped in a very short period of time.

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Definitions:

Contractual Obligation

A legal duty borne out of a contract, requiring a party to act or refrain from acting in a certain way.

Uncertain Future Event

An uncertain future event is an event or occurrence that may or may not happen, impacting plans, decisions, and outcomes depending on its eventual realization or lack thereof.

Quasi-contract

A legal concept where a court enforces an obligation on parties as if a contract existed, to prevent unjust enrichment.

Materially Breached

A significant failure to meet one's contractual obligations, which permits the other party to the contract to either enforce the contract or be released from it.