A Price-Cost Squeeze Is a Tactic Used

question 65

Multiple Choice

A price-cost squeeze is a tactic used:

• A) to prevent potential competitors from entering a market.
• B) by a vertically integrated firm to squeeze the margins of its competitors.
• C) by a vertically integrated firm to charge downstream rivals a prohibitive price for an essential input, forcing rivals to use more costly substitutes or exit the industry.
• D) to gain a critical mass of consumers by charging an initial low price.