Predatory Pricing Is a Type of Price Discrimination That

question 146

Multiple Choice

Predatory pricing is a type of price discrimination that:

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

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Definitions:

Fixed Asset

Long-term tangible assets, such as machinery and buildings, used in the operation of a business, not expected to be consumed or converted into cash in the short term.

Cash Flow Statement

A financial statement that provides aggregate data regarding all cash inflows and outflows a company receives from its ongoing operations, investment, and financing activities.

Investing Activities

Transactions and events related to the acquisition or disposal of long-term assets and investments not included in cash equivalents.

Accounts Payable

Liabilities of a business that represent amounts due to suppliers or creditors for goods and services received but not yet paid for.