Direction. Write True if the statement is correct and False if it is incorrect.

1. In a free market, a product’s price would be set by the forces of demand and supply from customers.
2. Cost and price are interchangeable terms.
3. Mark-up pricing is common in retailing.
4. Charging a high price for products tends to encourage new competition into a market.
5. Price lows to start when two or more competitors continually undercut each other’s prices