The Practice of First Setting Prices Low with the Intention

question 144

Short Answer

The practice of first setting prices low with the intention of pushing competitors out of the market or keeping new competitors from entering the market, and then raising prices to normal levels is referred to as ________ pricing.

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Definitions:

Assembly Department

A part of a production facility where pieces are combined to form complete products.

Direct Labor-Hours

Direct labor-hours measure the amount of time workers or employees spend directly working on producing goods or providing services.

Departmental Predetermined Rate

A rate used to allocate overhead costs to products or services, calculated in advance and based on the estimated costs and activity levels of a specific department.

Assembly Department

A segment in manufacturing where components are assembled into finished products.