Setting prices low to drive competitors out of the market and then raising prices is called:
A) predatory pricing
B) market-based pricing
C) price dumping
D) collusive pricing

Question

Quizplus · Accepted Answer

Predatory pricing is the practice of setting prices low to drive competitors out of the market and then raising prices once the competition is eliminated. This is an anti-competitive practice that is illegal in some countries. Therefore, predatory pricing is the best choice. Market-based pricing is a legitimate pricing strategy that involves setting prices based on market demand and competition. Price dumping and collusive pricing are also illegal and anti-competitive practices that involve selling products at prices lower than the cost of production or colluding with competitors to fix prices respectively.

Setting Prices Low to Drive Competitors Out of the Market