When is predatory pricing a most effective entry barrier?
A)When the incumbent has incurred them and the entrant has not
B)When incumbents have long-standing relationships with suppliers and customers
C)When channels are few and hard to replicate
D)When a firm has a reputation for toughness or competes in multiple markets
E)When marginal costs are low and flooding the market causes large price reductions

Question

Quizplus · Accepted Answer

Predatory pricing is most effective as an entry barrier when a firm has a reputation for toughness or competes in multiple markets, as this can deter potential entrants by signaling that the incumbent is willing to sustain losses to maintain market dominance.

When Is Predatory Pricing a Most Effective Entry Barrier