Which of the following is the best response for the statement, "Anyone seeking a profit maximization objective will charge high prices"?
A. This is always true.
B. This is not always true.
C. Prices will always be higher than the competitor's.
D. Prices tend to stay below the competitor's prices.
E. None of the above relate to the statement.
Answer: (B) Pricing to achieve maximization of profits does not always lead to higher prices. Demand and supply may bring high prices if the competition cannot offer a good substitute product. (A) is incorrect. High prices are not always charged in order to develop profit maximization. (C) and (D) are incorrect because the price of competition is usually developed based upon the elasticity of price for a given product or market. (E) is not the correct choice, because one of the other answers is correct.