________ occurs when a firm cuts prices below production costs in a deliberate attempt to drive competitors out of business.

Question

Quizplus · Accepted Answer

Predatory dumping is a strategy where a company intentionally lowers prices below their production costs to eliminate competition from other firms. This creates an unfair advantage for the predator firm as they are able to sustain losses for a longer period of time and eventually monopolize the market. Voracious dumping and ravaging dumping are not recognized terms in economics, and deliberate dumping does not capture the predatory nature of the practice.

________ Occurs When a Firm Cuts Prices Below Production Costs