The Practice of Setting Prices Deliberately Below ________ Costs in an Effort

question 121

Multiple Choice

The practice of setting prices deliberately below ________ costs in an effort to drive a competitor out of the market is known as predatory pricing.

• A) marginal
• B) average total
• C) average variable
• D) average fixed
• E) explicit

---

Definitions:

Attract New Firms

Strategies or policies designed to encourage businesses to establish operations in a particular area.

Accounting Profits

The difference between a company's total revenue and its total expenses, excluding taxes and costs not directly related to its core business operations.

Economic Profits

The difference between total revenue and total costs, including both explicit and implicit costs, measuring the performance of a firm beyond its opportunity costs.

Economic Profit

Economic profit is the difference between a firm's total revenue and its total costs, including both explicit and implicit costs, representing the excess over the firm's opportunity costs.