The Practice of Charging a Very Low Price for a Product

question 208

Multiple Choice

The practice of charging a very low price for a product with the intent of driving competitors out of business is referred to as

• A) price fixing.
• B) predatory pricing.
• C) price discrimination.
• D) deceptive pricing.
• E) geographical pricing.

Understand the importance of assumptions in economic modeling and their potential limitations.

Identify key factors of production and their roles.

Describe the concept of comparative and absolute advantages in trade.

Understand the role of economists and economic institutions in policy making and analysis.

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Definitions:

Feedback

Measures provided to operational employees or managers on the performance of subunits of the organization. These measures are used by employees to adjust a process or a behavior to achieve goals. See management by exception.

Systems Analysis

The process of studying and analyzing a system to identify its goals and purposes and to create systems and procedures that will achieve them in an efficient way.

Legal Organization

The way a business is structured legally, such as a corporation, partnership, or sole proprietorship, affecting liability and tax treatment.

User Needs

User needs refer to the requirements and preferences of the end-users that a product, service, or system aims to fulfill.