Golf & Tennis LLC makes and sells golf clubs, tennis racquets, and related sporting goods. By selling its products at prices substantially below the normal cost of production, Golf & Tennis hopes to drive its competitors from the market. This is

Question

Quizplus · Accepted Answer

Golf & Tennis LLC's strategy of setting prices substantially below the normal cost of production is an example of predatory pricing. Predatory pricing is the act of selling products or services at a very low price, often below the cost of production, with the intent to drive competitors out of business. By eliminating its competitors, Golf & Tennis LLC hopes to eventually gain market power and increase prices to a level that allows for profitable sales.

Golf & Tennis LLC Makes and Sells Golf Clubs, Tennis