What situation occurs when a large incumbent sets a low price to drive smaller rivals from the market?
A)Limit pricing
B)Price leading
C)Predatory pricing
D)Quality pricing
E)Capacity expansion

Question

Quizplus · Accepted Answer

This situation describes predatory pricing, in which an established company sets a very low price for its products or services with the intention of driving smaller competitors out of the market. Once the smaller rivals are eliminated, the larger company can then increase its prices and regain its market power. This practice is illegal in many countries, as it can harm competition and consumers in the long run.

What Situation Occurs When a Large Incumbent Sets a Low