Limit Pricing Occurs When a Firm Sets Price

question 95

Multiple Choice

Limit pricing occurs when a firm sets price

• A) equal to marginal cost.
• B) equal to average cost.
• C) at different amounts for different groups of consumers.
• D) so low that other firms are prevented from entering the market.

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Definitions:

Current Account

Part of a country's balance of payments, it includes the trade balance, net income from abroad, and net current transfers.

Capital Account

A national account that records transactions involving the purchase and sale of assets, such as property rights and stocks, between residents and non-residents.

Personal Savings Rate

The percentage of personal disposable income that is saved by households rather than spent on consumption.

Current Account Deficit

A current account deficit occurs when a country's total imports of goods, services, and transfers are greater than its total exports, indicating it is spending more on foreign trade than it is earning.