When firms have had to defend themselves against the charge that they have adopted unjustifiably low prices either to drive a competitor out of business or to prevent the entry of a rival, they have been accused of
A)creating a trust.
B)conspiracy.
C)predatory pricing.
D)price discrimination.

Question

Quizplus · Accepted Answer

Predatory pricing is the act of setting low prices with the intention of eliminating competition, and thus potentially raising prices after the competition is gone. This is a violation of antitrust laws, as it harms competition and could create a monopoly.

When Firms Have Had to Defend Themselves Against the Charge