Which of the following is a characteristic of 'Algorithmic Pricing'?
A. The use of algorithms to set prices automatically, potentially leading to tacit collusion or rapid price adjustment
B. Only manual price setting by humans
C. Only cost-plus pricing without data
D. Prices that never change
Answer: Option A
Solution (By JKSSB Mock Tests)
Algorithmic pricing employs software algorithms that automatically adjust prices in response to demand, competitor prices and other data; under certain conditions it can facilitate tacit collusion or increase price volatility.
Explanation:
A Pareto efficient allocation is one where it is impossible to make any individual better off without making at least one individual worse off.
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