Question
Which of the following pricing strategies is illegal in the United States and many other countries?
Question 1 options:
price fixing
price skimming
bait-and-switch advertising
penetration pricing
Question 1 options:
price fixing
price skimming
bait-and-switch advertising
penetration pricing
Answers
GPT-4o mini
The pricing strategy that is illegal in the United States and many other countries is **price fixing**. Price fixing occurs when two or more competitors agree on pricing rather than letting market forces dictate prices, which is considered anti-competitive and a violation of antitrust laws.
**Bait-and-switch advertising** can also be illegal as it involves advertising a product at a low price with the intention of persuading customers to buy a different, often more expensive, product. However, price fixing is more systematically recognized as illegal across jurisdictions.
**Price skimming** and **penetration pricing** are legal pricing strategies that businesses use to enter and compete in the market.
**Bait-and-switch advertising** can also be illegal as it involves advertising a product at a low price with the intention of persuading customers to buy a different, often more expensive, product. However, price fixing is more systematically recognized as illegal across jurisdictions.
**Price skimming** and **penetration pricing** are legal pricing strategies that businesses use to enter and compete in the market.