Firms that can effectively price discriminate will increase profitability when they engage in
A)limit pricing.
B)vertical foreclosure.
C)a price-cost squeeze.
D)any of the statements associated with this question are correct.

Question

Quizplus · Accepted Answer

Firms that can effectively price discriminate will increase profitability, regardless of the specific tactic they use. Limit pricing refers to a strategy whereby a firm sets a price low enough to discourage new entry into the market. Vertical foreclosure occurs when a firm restricts access to inputs or distribution channels, thereby limiting competition. A price-cost squeeze occurs when a firm is unable to pass on cost increases to consumers due to competitive pressures. All of these strategies may be used in conjunction with price discrimination to increase profits.

Firms That Can Effectively Price Discriminate Will Increase Profitability When