The Use of High Prices and Profits on One Product

question 72

Multiple Choice

The use of high prices and profits on one product to subsidize low prices on another product is

• A)Substitute pricing.
• B)Profit subsidization.
• C)Profit sharing.
• D)Cross-subsidization.

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Definitions:

M1

A category of the money supply that includes all physical money such as coins and currency, as well as demand deposits, and other liquid assets easily convertible to cash.

Less Liquid

Describes assets that cannot be easily converted to cash without significant loss in value, relative to more liquid assets.

Roundabout Trade

Trade activities that involve the importing and exporting of goods through intermediate destinations rather than directly between the primary source and final destination.

Double-Coincidence

The situation in a barter system where two parties each possess an item the other wants, enabling an exchange without the need for a medium of exchange like money.