The Practice of Changing a Very Low Price for a Product

question 4

Multiple Choice

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

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

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Definitions:

Straight-Line Basis

A method of calculating depreciation or amortization by equally spreading the cost of an asset over its useful life.

Cash Flow from Operations

The cash generated by a company’s normal business operations.

Initial Investment

The initial amount of money spent to start a project or investment, often used as a baseline for calculating future returns.

Net Present Value

A calculation used to assess the profitability of an investment, considering the present value of its cash inflows and outflows over time.