Reputation for undercutting prices of any competitor
Business Economics
Yummy foods, a gourmet food store, has stores all over the Chicago area. They have a reputation for undercutting prices of any competitor that tries to enter the market until the competitor is driven out of business. Which of the following statements is true?
a) Yummy foods is using the kinked-demand curve theory
b) Yummy foods entry deterring strategy is to engage in a price war
c) Yummy food is engaging in overt collusion
d) Yummy foods is using price leadership along with the limit pricing model
When a U.S steel, a steel producer, bought control of iron ore companies at the beginning of the 20th century, the company was initiating
a) an expropriation
b) a horizontal merger
c) vertical merger
d) cartel
