When industry has excess capacity, market prices may drop sizably below their historical average.If this drop is temporary, it is called
A)distress pricing.
B)dropped pricing.
C)low-average pricing.
D)substitute pricing.
E)fire sale.

Question

Quizplus · Accepted Answer

Distress pricing occurs when prices are temporarily lowered due to excess capacity or other short-term factors, often to cover costs or stimulate demand.

When Industry Has Excess Capacity, Market Prices May Drop Sizably