Questions are multiple choice however there can be more than one correct answer.
ID: 384102 • Letter: Q
Question
Questions are multiple choice however there can be more than one correct answer. 1. Which of the following statements concerning predatory pricing, if any, are correct? The commonly used economic and legal definition of predatory pricing is that it is present whenever a firm charges a price in one market that is lower than what it charges for the same product in other markets. a) b) Theoretically, predatory pricing is profitable even when the predatory firm has no c) Instances of potentially successful predatory pricing where rivals are driven out of d) John D. Rockefeller's Standard Oil is the best-documented example of a successful advantage over its rivals. business appear to be rare. application of predatory pricing. e) Instances of potentially successful predatory pricing where rivals are driven out of business appear to be very common. 2. Which of the following statements concerning resale price maintenance (RPM), or fair trade, are correct? a) Under RPM the manufacturer imposes the maximum price the retailer may charge its b) RPM is still legal in the U.S., but it has been outlawed in Europe. c) Under RPM the manufacturer imposes the minimum price the retailer may charge its customers. customers. Under RPM the manufacturer assigns a territory to each retailer. Prohibition of RPM usually causes prices to fall. d) e)Explanation / Answer
1.
(a)
(e)
Reason: It defines when the prices are going down to such a level that the other company cannot compete with the standards and they bound to leave the market.
2.
(c)
Reason: It is the agreement that prohibits the manufacture and the wholesaler to sell the product at an optimum price.
3.
(c)
Reason: “The options itself are the explanation of question”
4.
(a)
Reason: The issue takes place when non-identical information is possessed by the buyer and seller.
5.
(b)
(e)
Reason: “The options itself are the explanation of search qualities”
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