A Foreign Company That Enjoys High Prices and High Profits

question 94

True/False

A foreign company that enjoys high prices and high profits at home as a result of trade barriers against imports can use those profits to sell at much lower prices in foreign markets in order to build market share at the expense of competitors with open home markets. This is known as monopoly pricing.

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Definitions:

Stimulus

A signal or piece of data that elicits or influences a physiological or psychological response or activity.

Operant Conditioning

A learning theory which posits that behavior can be changed through the use of consequences, such as rewards or punishments.

Stimulus

Any event or situation that evokes a response from an organism in psychology and biology.

Correlation Coefficient

A statistical measure that indicates the extent to which two variables change together, but does not imply causation.