During the last year, ABC Company and XYZ Company have been battling each other for market share in the greater Detroit marketing area. Competition has included stepped up advertising and larger than usual product discounts to attract customers. ABC Company recently filed a case in federal court alleging violations of federal antitrust laws by XYZ Company. As proof of predatory pricing activities by XYZ, ABC shows the court that XYZ has experienced average monthly losses in its Detroit area sales region of $100,000 for each of the last six months. During a similar period the previous year, XYZ had monthly average regional profits of $60,000. This data shows that:
During the last year, ABC Company and XYZ Company have been battling each other for market share in the greater Detroit marketing area. Competition has included stepped up advertising and larger than usual product discounts to attract customers. ABC Company recently filed a case in federal court alleging violations of federal antitrust laws by XYZ Company. As proof of predatory pricing activities by XYZ, ABC shows the court that XYZ has experienced average monthly losses in its Detroit area sales region of $100,000 for each of the last six months. During a similar period the previous year, XYZ had monthly average regional profits of $60,000. This data shows that:
| A. |
XYZ Company was clearly engaged in predatory pricing activities.
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| B. |
XYZ Company clearly went from a
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| C. |
ABC Company must have experienced similar profit problems.
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| D. |
XYZ Company's sales volume must have gone down.
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