Firms engage in an activity called forward pricing

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Firms engage in an activity called “forward pricing” when they establish, during the early stages of the learning-curve, a price for their products that is lower than their actual costs, in anticipation of lower costs later on, after significant learning has occurred. Under what conditions, if any, does forward pricing make sense? What risks, if any, do firms engaging in forward pricing face?

Reference no: EM131725392

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