Penny Bank, a discount store, is highly competitive. When entering a new market, Penny Bank often cuts prices so deeply that it sells below costs, effectively pushing smaller retail stores with less purchasing power out of the market. In this case, Penny Bank is using ________.
A) market skimming
B) psychological pricing
C) predatory pricing
D) deceptive pricing
E) cost-plus pricing

Question

Quizplus · Accepted Answer

Penny Bank is using predatory pricing, which involves setting extremely low prices to drive competitors out of business and gain a monopoly in the market. This is a strategy that is illegal in many countries, as it can be seen as anti-competitive behavior.

Penny Bank, a Discount Store, Is Highly Competitive