Evidence of the Intent to __________ Is Necessary to Prove

question 23

Multiple Choice

Evidence of the intent to __________ is necessary to prove that a firm is engaged in predatory pricing.

• A) lower prices after others are driven out of business
• B) raise prices after others are driven out of business
• C) increase quantity after others are driven out of business
• D) lower average fixed costs after others are driven out of business
• E) subsidize competitors so that they are not driven out of business

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Definitions:

Short-Run Adjustments

Refers to the changes firms make in response to changing market conditions in the short term when at least one production factor is fixed.

Oligopolists

Firms that are part of an oligopoly, a market structure with a small number of firms dominating the market, leading to limited competition.

Inverted-U Theory

A theoretical concept suggesting that a variable's effect on a particular outcome increases to a point but then begins to decrease as the variable continues to increase.

Market Structures

The organizational and other characteristics of a market that significantly affect the nature of competition and pricing within that market.