Question

price fixing means that a company has _____________.

a. joined with other companies to agree that all of them will set the price high
b. broken the law if it prices a product too low
c. done research to establish the perfect price for a product
d. none of these is correct.

Explanation:

To determine the correct answer, we analyze the concept of price fixing. Price fixing is an illegal practice where companies collude (agree together) to set prices, often to artificially inflate them and reduce competition.

• Option A: Matches the definition of price fixing, as it involves companies agreeing to set high prices (or any fixed price) together.
• Option B: Pricing too low is typically related to predatory pricing (a different concept), not price fixing. Price fixing is about colluding to set prices, not about pricing too low being illegal in itself as described here.
• Option C: Researching to set a price is normal market analysis (like price optimization), not price fixing.
• Option D: Incorrect because Option A is correct.

Answer:

A. joined with other companies to agree that all of them will set the price high