Some economists believe that firms rarely attempt predatory pricing because it would be a very risky act

Question:

Some economists believe that firms rarely attempt predatory pricing because it would be a very risky act even if it were legal. Why may this be so?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Economics Principles and Policy

ISBN: 978-0538453653

12th edition

Authors: William J. Baumol, Alan S. Blinder

See More Books

Question Posted: Apr 12, 2016 07:16 AM

See More Questions

Why do some economists believe that better inventory control software may help to reduce the frequency and severity of recessions? Could differences in technology explain why recessions appear to be...
Some economists believe that in order to really understand macroeconomics, you must first understand microeconomics. How does microeconomics relate to macroeconomics?
Some economists believe that taxes have an important effect on labour supply. They argue that higher taxes cause people to want to work less and that lower taxes cause them to want to work more....
The accompanying data were read from graphs that appeared in the article Bush Timber Proposal Runs Counter to the Record (San Luis Obispo Tribune, September 22, 2002). The variables shown are the...
Financial accounting information can often be found at financial websites. These websites are useful for collecting information about a companys stock price, analysts forecasts, dividend history,...
3.3. Using the BEMT, show the effect of increasing linear twist on the variations in inflow, thrust, induced power, profile power, and lift coefficient across the span of a rotor with four blades of...
Use the following balance sheets and income statement to answer Required Use the indirect method to prepare the cash provided or used from operating activities section only of the statement of cash...
The general ledger of Pack-N-Ship at June 30, 2012, the end of the companys fiscal year, includes the following account balances before adjusting entries. The additional data needed to develop the...
Sweeten Company had no jobs in progress at the beginning of March and no beginning inventories. The company has two manufacturing departments--Molding and Fabrication. It started, completed, and sold...
JLChem Corporation, a chemical manufacturing firm with changing investment opportunities, is considering a major change in dividend policy. It currently has 50 million shares outstanding and pays an...
During the oil crisis in the 1970s, long lines at gas stations disappeared soon after price controls were removed and gas prices were permitted to rise. Should this event be interpreted as evidence...
Firm X cuts its prices, and competing Firm Y soon goes out of business. How would you judge whether this price cut was an act of legitimate and vigorous competition or an anticompetitive act?
Transportation Quarterly (Jan. 1993) identified several studies on truck accidents that utilized misleading or inappropriate probability analysis. Consider the following excerpt from the article.*...
Consider the project information in the table below: Draw and analyze a project network diagram to answer the following questions: a. If you were to start on this project, which are the activities...
Lacey, Inc., had the following sales and purchase transactions during 2011. Beginning inventory consisted of 80 items at $\$ 120$ each. Lacey uses the FIFO cost flow assumption and keeps perpetual...
Refer to the Camp Sunshine data presented in E5-9. Required: 1. Perform a least-squares regression analysis on Camp Sunshines data. 2. Using the regression output, create a cost equation (Y = A + BX)...
The following information pertains to the first year of operation for Sonic Boom Radios, Inc. Required: Prepare Sonic Booms full absorption costing income statement and variable costing income...
Jane Crawford, the president of Crawford Enterprises, is considering two investment opportunities. Because of limited resources, she will be able to invest in only one of them. Project A is to...
A function f(x) is periodic of period 2 and is defined by Sketch a graph of f(x) from 2 to 3 and prove that Hence show that f(x) = [-2x (- < x 0) 2x (0 < x )
Which property determines whether a control is available to the user during run time? a. Available b. Enabled c. Unavailable d. Disabled
Name some companies that you think could succeed today with a globalization strategy and explain why you selected those companies. How does the globalization strategy differ from a multidomestic...
Some people who do not understand the optimal purchase rule argue that if a consumer buys so much of a good that its price equals its marginal utility, the consumer could not possibly be behaving...
John Q. Public spends all of his income on tacos and hot dogs. Draw his budget line under several conditions: a. His income is $100, and one taco and one hot dog each cost $2. b. His income is $150,...
You have just been hired as a new management trainee by Earrings Unlimited, a distributor of earrings to various retail outlets located in shopping malls across the country. In the past, the company...
Difference between Operating Leverage and Financial Leverage
bpmn diagram for misc purchases

Some economists believe that firms rarely attempt predatory pricing because it would be a very risky act

Question:

Step by Step Answer:

Predatory pricing exists when a firm temporarily reduces its price below the profitmaximizi...View the full answer

Economics Principles and Policy

Students also viewed these Economics questions