Question

Big Corp. (BC) operated in all 50 states. In all the states except Oregon, BC was the dominant firm in its industry. Small Corp. (SC) operated only in Oregon, but was the dominant firm in that state. BC decided it wanted to destroy SC so that it would become dominant in Oregon. BC cut its prices and sold below cost in Oregon, while maintaining regular prices everywhere else. This is an example of:

A. first-line price discrimination

B. secondary level price discrimination

C. tertiary level price discrimination

D. super-tertiary level price discrimination

Answer

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