Spa Company makes and sells beauty salon supplies. By selling its products at prices substantially below the normal cost of production, Spa hopes to drive its competitors from the market. This is

Question

Spa Company makes and sells beauty salon supplies. By selling its products at prices substantially below the normal cost of production, Spa hopes to drive its competitors from the market. This is​

Quizplus · Accepted Answer

Predatory pricing refers to setting low prices to drive competitors from the market, with the intention of raising prices once competitors have been eliminated. This strategy is often illegal and can harm consumers and fair competition. Therefore, Spa Company's strategy is an example of predatory pricing.

Spa Company Makes and Sells Beauty Salon Supplies