Question

Which of the following is true of administered pricing?

A) The end goal of all administered pricing activities is to increase price competition.
B) The legality of administered pricing arrangements is uniform across all nations.
C) Administered pricing is legal, as long as it takes place through a cartel.
D) Administered pricing is the practice of promoting general welfare by increasing the number of firms in a market.
E) Administered pricing may be arranged through the cooperation of competitors or by international agreement.

Answer 1

Administered pricing is the practice of controlling prices through the cooperation of competitors or international agreements.

Step-by-step explanation:

Administered pricing refers to the practice of controlling prices by a government, organization, or entity, rather than allowing market forces to determine prices. From the given options, the correct statement about administered pricing is E) Administered pricing may be arranged through the cooperation of competitors or by international agreement.

Administered pricing can be arranged through the cooperation of competitors who agree to set prices at a certain level or by international agreements between countries. An example of administered pricing is when OPEC (Organization of Petroleum Exporting Countries) members coordinate to set oil prices.

It is important to note that administered pricing is generally considered to be against antitrust laws, which aim to promote fair competition and prevent collusion among competitors to fix prices or monopolize the market.