Phillip Esten operates a mail store in which he offers various services such as packaging items for shipment,delivering items to overnight services,and a fax machine.Esten has been charging $2.00 per page for the fax service,but a new store has opened in a nearby shopping center that is charging $1.00 per page.Esten lowers his price to $.50 per page,knowing this charge will not always cover his cost.Esten's actions:

Question

Quizplus · Accepted Answer

Esten's actions constitute meeting the competition, which is not considered a violation of any antitrust laws. Although he knows that his new price may not cover his cost, he is choosing to compete with the new store rather than losing customers to them. This is a common practice in a competitive market.

Phillip Esten Operates a Mail Store in Which He Offers