In One of Its Least Favorite Actions, Amazon

question 353

Multiple Choice

In one of its least favorite actions, Amazon.com was caught fiddling with its price tags.Avid videodisc buyers, buying in quantity for resale, found that the online store was offering different customers different prices for the same DVD, and complained vociferously.Amazon was caught red-handed.It was, company officials admitted, trying to see how much it could charge for an item before buyers balked.No matter what the reasoning behind it, Amazon.com was using

• A)horizontal price-fixing.
• B)resale price maintenance.
• C)price discrimination.
• D)predatory pricing.
• E)bait-and-switch pricing.

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Definitions:

Marginal Cost Curve

A graphical representation showing how the cost to produce one additional unit of a good changes as production volume changes.

Break-even Point

The point at which total costs and total revenues are equal, meaning a business or project is neither making a profit nor a loss.

Marginal Cost

The additional cost incurred from producing one more unit of a product or service, which can influence production decisions.

Marginal Revenue

The augmented income earned from trading one extra unit of a product or service.