Happy Campers is competing in the camping market with Camping R Us. Happy Campers drops its price below its cost and, in doing so, drives Camping R Us out of the market. Once Happy Campers is a monopoly, they raise their price and enjoy economic profit. This is an example of_______ .

Question

Quizplus · Accepted Answer

This scenario describes predatory pricing, where Happy Campers sets prices below the cost to force Camping R Us out of the market and become a monopoly, ultimately raising prices and enjoying economic profit. Market division involves dividing up the market with competitors, bid rigging involves colluding with competitors to set prices, and resale price maintenance involves dictating the price at which resellers can sell a product.

Happy Campers Is Competing in the Camping Market with Camping