It Costs $1 to Produce an Item and There Are

question 21

Multiple Choice

It costs $1 to produce an item and there are 2 producers of that item. In order to be competitive, Producer 1 sells the items for $2 to all his purchasers, regardless of where they are located, which gives him a profit of $1 on each item. Producer 2, on the other hand, sells his items for $2 if they are located in an area that competes with Producer 2, but $1.50 if they are located in an area that doesn't compete with Producer 2 and this tactic is used to keep Producer 1 out of the market that's currently not served by him. This is an example of:

• A) price discrimination.
• B) price fixing.
• C) bid rigging.
• D) perjury.

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Definitions:

Marketing Efforts

Activities and campaigns undertaken by a company to promote its products or services and increase its market presence.

Generating Revenue

The process of making money through various activities like sales, services, and other commercial ventures.

Tony the Tiger

The advertising cartoon mascot for Kellogg’s Frosted Flakes cereal, known for his catchphrase, "They’re Gr-r-reat!"

Brand

A distinguishing symbol, mark, logo, name, word, sentence, or a combination of these, used by companies to distinguish their product or service from others.