Predatory Pricing

question 64

Multiple Choice

Predatory pricing:

• A) is an aggressive business move to maintain market power.
• B) was used by DeBeers to maintain control over the diamond market.
• C) is when a firm intimidates others to maintain the high prices the largest firms set.
• D) All of these statements are true.

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Definitions:

Special Acquisition Fees

Costs specifically related to acquiring an asset or a group of assets, other than the purchase price.

Units-of-Activity Method

A depreciation method that allocates expense based on the number of units produced or the use of the asset over time.

Depreciation Expense

A measure of the wearing out, consumption, or other loss of value of a depreciable asset arising from use, effluxion of time, or obsolescence through technology and market changes.

Allocation of Cost

The process of assigning a cost or group of costs to one or more cost objectives, such as projects, functions, or departments.