Predatory pricing is:
| a) |
temporarily slashing prices below cost to force competitors out of the market. |
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| b) |
an aggressive business move to maintain market power. |
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| c) |
used to discourage competitors. |
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| d) |
All of these statements are true |
Advertising:
| a) |
can cause price competition and drive prices down. |
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| b) |
and its effects are a hotly debated topic. |
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| c) |
can cause perceived differences that don't exist and drive prices up. |
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| d) |
All of these statements are true. |
As long as firms currently in a monopolistically competitive market are earning profits:
| a) |
the government will step in to regulate prices to ensure they stay competitive. |
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| b) |
there must be large barriers to entry. |
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| c) |
more firms will enter the market with products that are close substitutes. |
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| d) |
more firms will leave the market before the profits are competed away. |
When firms have market power, it means that they:
| a) |
do not affect the market quantity offered for sale. |
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| b) |
are a price taker. |
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| c) |
can noticeably affect the market price. |
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| d) |
None of these is true. |
1.Predatory pricing is temporarily setting prices too low even at the cost of earning losses,to drive the competitors out of the market.
Answer-D
2.Advertising is a tool used by firms to create differences that may not exist between products,to charge a higher price for the product.
Answer-C
3.Attracted by profits more firms will enter a monopolistic market due to absence of barriers to entry.
Answer-C
4.When firm have market power they influence the price of the product,like monopolies.
Answer-C
Predatory pricing is: a) temporarily slashing prices below cost to force competitors out of the market....