Predatory Pricing Is a Type of Price Discrimination That

question 15

Multiple Choice

Predatory pricing is a type of price discrimination that

• A)allows prices to be cut to the level of variable costs.
• B)is required when a company declares bankruptcy so that it can sell its remaining goods quickly.
• C)is used in the food industry for perishable goods.
• D)deliberately sets prices very low, sometimes even below costs, so as to minimize competition.
• E)actually ensures more supply access as high prices reduce demand.

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Definitions:

Subsidiaries

Subsidiaries are companies that are owned or controlled by another larger company, known as the parent company, which often holds more than half of the subsidiary's stock.

Wholesalers

Entities in the distribution channel that buy in bulk and sell to resellers rather than to the end consumers directly.

BCG Business Portfolio

A strategic planning tool that classifies a company's business units or products into four categories (Stars, Cash Cows, Question Marks, Dogs) based on market growth and market share.

SBUs

Strategic Business Units are distinct parts of a corporation that operate as separate entities or profit centers.