Several national fast-food chains offer kids' meals with free giveaway toys, something many independent, local establishments cannot afford to do. The national chains are
A) engaging in predatory pricing.
B) selling meals below cost.
C) distributing toys below cost.
D) engaging in anti-competitive behavior because the independents cannot afford to give away toys.
E) almost certainly doing none of the above.
Question 2
Which of the following correctly identifies a problem with price regulation?
A) It minimizes social surplus.
B) It minimizes consumer surplus.
C) Sellers do not have an incentive to cut costs.
D) Government intervention increases deadweight loss.
