limit pricing is: A. a strategy whereby a firm temporarily prices below its marg
ID: 1211080 • Letter: L
Question
limit pricing is:
A.
a strategy whereby a firm temporarily prices below its marginal costs to drive competitors out of the market.
B.
a strategy used by a vertically integrated firm to raise rivals' costs of inputs, while holding constant final product prices.
C.
a strategy whereby an incumbent maintains a price below the monopoly price in order to prevent entry.
D.
the act of charging a low price initially upon entering a market to gain market share.
A.
a strategy whereby a firm temporarily prices below its marginal costs to drive competitors out of the market.
Explanation / Answer
The correct answer is option (D). Limit Pricing is the act of charging a low price initially upon entering a market to gain market share.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.