A major pharmacy retail chain opened a brand new location down the street from Peterson's drug store and has drastically reduced prices on many of the same products that Peterson's sells, forcing the store to go out of business. After Peterson's closed its store, the pharmacy retail chain began raising its prices to more normal levels. This is an example of

Question

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This is an example of predatory pricing, where a company sets very low prices with the intent to drive competitors out of the market. Once the competition is eliminated, the company raises its prices again.

A Major Pharmacy Retail Chain Opened a Brand New Location