- CFA Exams
- CFA Level I Exam
- Topic 2. Economics
- Learning Module 9. The Firm and Market Structures
- Subject 6. Price Discrimination
CFA Practice Question
Which of the following statements is correct? In the United States ______
B. it is illegal to practice price discrimination but not price fixing.
C. it is illegal to practice price fixing but not price discrimination.
D. both price fixing and price discrimination are legal.
A. it is illegal to practice price discrimination and/or price fixing.
B. it is illegal to practice price discrimination but not price fixing.
C. it is illegal to practice price fixing but not price discrimination.
D. both price fixing and price discrimination are legal.
Correct Answer: C
Price fixing is illegal but price discrimination is not.
User Contributed Comments 10
User | Comment |
---|---|
danlan | What is price fixing? |
gord | from google: "Agreement among competing vendors to sell at the same price" |
jerylewis | thanks! |
bobert | AKA collusion |
dnoyelles | like a cartel almost. |
MMattioli | opec |
StanleyMo | From gord i find out google is dominate (monopoly) at search engine world. |
DannyZhou | Google should belong to competition called oligopoly. |
YOUCANDOIT | price fixing will be talked about in the next reading regarding oligopolies....when firms restrict output and agree upon a mkt. price which leads to an inefficient allocation of resources. |
YOUCANDOIT | ...the agreed upon price will also be higher than the the efficient equilibrium price and will maximize industry profits which are shared amongst all firms equally (that is unless firms decide to cheat and dishonor the agreement) |