10. Questionable business practices according to antitrust agencies Complete the following table by matching each of the scenarios to the concept of resale price maintenance, predatory pricing, or tying. Resale Price Maintenance Predatory Pricing Scenario Warm Winds is the only firm producing air fryers. It costs $410 to produce one air fryer, and Warm Winds sells each air fryer for $1,000. After Sirocco, a new firm with the same costs as Warm Winds, enters the market for air fryers, Warm Winds starts selling its air fryers for a price of $330. RightRound sells a wide variety of records to retail record stores. RightRound recently pressed two new records: a popular pop punk album and a much less popular smooth jazz album. RightRound requires record stores to order 15 copies of the smooth jazz album for every 140 copies of the pop punk album bought. RightRound is a firm that manufactures record players. Suppose RightRound sells its record players to online retailers for $209 each and requires those online retailers to charge at least $229 to shoppers for Tying

The method through which firms determine the price of their products or services is known as their pricing strategy.Almost all companies, large and small, base the price of their products and services on the expenses of production, labor, and marketing before adding a predetermined sum to enable them to make a profit. i) Predatory pricing Predatory pricing is a kind of unfair pricing when established businesses lower their rates to keep new ones out of the market. It is often used in monopoly markets in order to preserve monopoly power. In the given scenario warm wind is the only producer of air fryer and they sell it at a price of $1000 now as a new firm enter in the market then they start selling the air fryer at the price of $330 to preserve their monopoly power. Thus it is an example of predatory pricing.ii) Tying Tying describes the act of grouping two products together and charging a single fee for the whole bundle. This is something that businesses often use in order to price discriminate and sell both their strong and poor products. In the given scenario RightRound offers several albums to retail record retailers. RightRound released a successful pop punk album and a less popular smooth jazz CD. RightRound compels record retailers to order 15 smooth jazz albums for 140 pop punk albums. Thus it is an example of tying. iii) Resale price maintanence When a manufacturer sets a lower cap on the price that each retailer may charge for its products, it is a sort of pricing where the competition at the retail level is reduced. Here ,RightRound makes record players. RightRound distributes record players to online shops for $209 and compels them to charge buyers at least $229. Thus it is an example of the resale price maintanence. False Predatory pricing is not a profitable strategy every time. It is because in short run the firm has to incur huge loss in order to preserve their monopoly in the market .

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