Suppose a competitor says that Walmart's everyday low prices are really a type of predatory pricing. Walmart contends that its efficient operations and strong relationships with suppliers, as well as a number of other factors, allow it to keep prices lower than competitors all of the time. A judge determines that Walmart is not guilty of predatory pricing. If Walmart's competitor wanted to prove it was guilty of predatory pricing, what would it have to do?
A) Show that Walmart was undercutting competitors to sell off excess inventory
B) Demonstrate that Walmart did not really have the lowest prices of all retailers
C) Prove that the prices were set low in order to drive out competitors
D) Maintain that Walmart's pricing strategy placed other firms at a disadvantage
E) Prove that Walmart was using price differentials to charge customers different prices

Question

Quizplus · Accepted Answer

In order to prove that Walmart's pricing strategy was predatory, the competitor would have to demonstrate that the prices were set low in order to drive out competitors. This means that Walmart intentionally lowered their prices in a way that harmed competition in the market, rather than simply providing lower prices due to their efficiencies and supplier relationships. The other choices (A, B, D, E) do not necessarily relate directly to predatory pricing.

Suppose a Competitor Says That Walmart's Everyday Low Prices Are