Sky-High Skywriters temporarily reduces its price when a new firm called The Sky's the Limit Skywriting enters the industry.Sky-High Skywriters is practicing
A)Retaliation.
B)Price leadership.
C)Predatory pricing.
D)Cartel pricing.

Question

Quizplus · Accepted Answer

Predatory pricing is a strategy where a firm lowers its prices to a level that is not sustainable in the long term to drive competitors out of the market or to deter new entrants. In this scenario, Sky-High Skywriters reduces its price temporarily in response to a new competitor, which aligns with the concept of predatory pricing.

Sky-High Skywriters Temporarily Reduces Its Price When a New Firm