The practice of setting price below cost with the intent to drive competitors out of business:
A) predatory pricing.
B) target pricing.
C) target costing.
D) peak-load pricing.

Question

Quizplus · Accepted Answer

Predatory pricing refers to the practice of setting prices below the cost of production with the intent of driving competitors out of the market. The primary aim of predatory pricing is to gain a monopoly in the market and subsequently increase prices. This practice is illegal in most countries as it is seen as anti-competitive behavior. Target pricing refers to setting prices based on the desired profit margins, while target costing refers to setting the cost of production based on the desired selling price. Peak-load pricing refers to adjusting prices during periods of high demand.

The Practice of Setting Price Below Cost with the Intent