To Drive Its Competitors Out of a Certain Geographic Segment

question 40

Multiple Choice

To drive its competitors out of a certain geographic segment of its market, Drones Inc. sets the prices of its products below cost for the buyers in that area. This is

• A)price-fixing.
• B)smart marketing.
• C)predatory pricing.
• D)price discrimination.

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Definitions:

Long-Run Equilibrium

A state in which all adjustments to any economic changes have been made, allowing for full resource flexibility and market adjustments.

Profit-Maximizing Price

The price level at which a firm maximizes its profits, typically found where marginal cost equals marginal revenue.

Panel

A group of people gathered to discuss, analyze, or judge a particular topic or issue, often in the context of a conference or public debate.

Economic Profit

The total revenue minus the opportunity costs of all inputs, a measure that considers both explicit and implicit costs.