Which of the Following Conditions May Make Predatory Pricing by Incumbents

question 13

Multiple Choice

Which of the following conditions may make predatory pricing by incumbents rational?

• A)When entry costs are very high
• B)When entrants are uncertain about market conditions
• C)When existing firms have significant coast advantages
• D)When entrants are required to obtain extensive licensing and regulatory approvals
• E)When exiting firms have increasing marginal revenue

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Definitions:

Obsession

A persistent thought, idea, impulse, or image that is experienced repeatedly, feels intrusive, and causes anxiety.

Flooding Episode

In psychology, a therapeutic technique involving intense exposure to fear-evoking stimuli without any danger, to overcome phobias or anxiety.

Compulsion

Compulsion involves repetitive, unwanted behaviors or mental acts that an individual feels driven to perform, often in response to obsessive thoughts.

Biological

Relating to the processes and substances that occur within living organisms.