Allie owns the largest chain of spa centres in Sydney.Whenever a new spa centre opens within 100 m of one of her centres, Allie drops her prices to less than cost in order to ensure that no one chooses to use the new centre.Allie appears to be engaging in:

Question

Quizplus · Accepted Answer

Allie's actions of dropping prices below cost in order to eliminate competition within 100 m of her spa centres can be considered as an abuse of her market power, as it is an anti-competitive behavior intended to prevent the new centre from attracting customers. Therefore, option D, misuse of market power, is the best choice. Options A, B and C are not applicable in this scenario.

Allie Owns the Largest Chain of Spa Centres in Sydney