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vlabodo [156]
3 years ago
12

Firm A and Firm B are the only two companies that sell mail-order DVD rental subscriptions. For several years, Firm A priced its

subscriptions below average variable cost. Firm B tried to compete by also selling subscriptions below average variable cost, but went bankrupt and exited the market. Several months after Firm B exited the market, Firm A raised prices by 40 percent and is currently earning large, positive economic profits. Based only on this information, an argument can be made that:____________.
A. the mail-order DVD rental subscription market is a monopolistically competitive market.
B. Firm A engaged in predatory pricing.
C. Firm B must have made bad business decisions because it went bankrupt.
D. Firm B engaged in predatory pricing.
E. FirmA and Firm B must have had a collusive agreement
Business
1 answer:
timurjin [86]3 years ago
6 0

Answer:

B. Firm A engaged in predatory pricing.

Explanation:

Since Firm A and B are the only two companies that sell this good

Firm A decided to price its subscriptions below average variable cost that is it lowered it's prices which made Firm B to also lower it's own, but they went bankrupt and exited the market. Firm A then raised prices by 40% and is currently earning large, positive economic profits.

Based on this, Firm A engaged in predatory pricing.

Predatory pricing is a marketing or pricing strategy that has to do with lowering the cost of goods and services for a short-term, in order to make competitors lower their price, making them to go bankrupt in the process and thereby exiting the market.

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The client is prescribed an antibiotic for a streptococcal infection and asks the health care practitioner whether the medicine
lisov135 [29]

Answer:

The medicine should be taken with food

Explanation:

Drugs work effectively when taken with food

6 0
3 years ago
A company reported net income of $290,000. Beginning balances in Accounts Receivable and Accounts Payable were $18,000 and $21,0
NikAS [45]

Answer:

$310,500

Explanation:

The first step is to calculste the increase in account payable

= ending amount-beginning balance

= $29,000-$11,500

= $17,500

Decrease in account receivable

= $21,000-$18,000

= $3,000

Therefore the cash flow can be calculated as follows

= $290,000 + $17,500 + $3000

= $310,500

8 0
3 years ago
The financial statements of Vaughn Manufacturing Company report net sales of $643100 and accounts receivable of $92000 and $2600
Sloan [31]

Answer:

The correct answer is 10.9 times.

Explanation:

According to the scenario, computation of the given data are as follow:-

Average account receivable = (Opening account receivable + Closing accounts receivable) ÷ 2

= ($92,000 + $26,000) ÷ 2

= $118,000 ÷ 2

= $59,000

We can calculate the account receivable turnover by using following formula :-

Accounts receivable turnover = Net sales ÷ Average Account receivable

= $643,100 ÷ $59,000

= 10.9 times  

3 0
3 years ago
If the Fed wanted to use all four of its major monetary policy control tools to increase the money supply it would _____.
Georgia [21]

Answer:

sell bonds, increase discount rates and increase reserve requirements

Explanation:

The Federal Reserve’s three instruments of monetary policy are open market operations, the discount rate and reserve requirements ( Sometimes discount rate management is divided as discount and interest rate) .

Open market operations involve the buying and selling of government securities. The term “open market” means that the Fed doesn’t decide on its own which securities dealers it will do business with on a particular day. Rather, the choice emerges from an “open market” in which the various securities dealers that the Fed does business with – the primary dealers – compete on the basis of price. Open market operations are flexible, and thus, the most frequently used tool of monetary policy.

The discount rate is the interest rate charged by Federal Reserve Banks to depository institutions on short-term loans.

Reserve requirements are the portions of deposits that banks must maintain either in their vaults or on deposit at a Federal Reserve Bank.

7 0
3 years ago
HOW MUCH IS 5OO ROUNDED TO THE NEAREST 10TH
Anit [1.1K]
500 rounded to the nearest tenth is 500 because there is nothing to round

6 0
4 years ago
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