Predatory pricing is more than just setting prices below cost. To qualify, it must:
A)Take place in a market with numerous rivals.
B)Be anti-consumer in outcome.
C) Be followed by a price increase after rivals are eliminated.
D) None of the above.

Question

Predatory pricing is more than just setting prices below cost. To qualify, it must:
A)​Take place in a market with numerous rivals.
B)​Be anti-consumer in outcome.
C) Be followed by a price increase after rivals are eliminated.
D) ​None of the above.

Quizplus · Accepted Answer

Predatory pricing involves the deliberate setting of prices below cost by a dominant firm to drive rivals out of business. To qualify as predatory pricing, this behavior must be followed by a price increase once rivals are eliminated, resulting in anti-competitive outcomes. Moreover, the practice typically occurs in markets with numerous rivals. Hence, option C is the correct answer.

Predatory Pricing Is More Than Just Setting Prices Below Cost