When Lofonift Inc.introduced its flagship product,an MP3 player,it captured the MP3 player market by offering its product at the lowest price in the market.This gradually forced many of its competitors out of business.Once its competitors were out of business,Lofonift Inc.raised its prices.In this scenario,Lofonift Inc.most likely indulged in _____.
A)predatory pricing
B)price discrimination
C)status quo pricing
D)price fixing

Question

When Lofonift Inc.introduced its flagship product,an MP3 player,it captured the MP3 player market by offering its product at the lowest price in the market.This gradually forced many of its competitors out of business.Once its competitors were out of business,Lofonift Inc.raised its prices.In this scenario,Lofonift Inc.most likely indulged in _____.
A)​predatory pricing
B)price discrimination
C)status quo pricing
D)​price fixing

Quizplus · Accepted Answer

Lofonift Inc. indulged in predatory pricing by pricing their product at the lowest possible price to drive their competitors out of business and once they had succeeded in doing so, they raised their prices. This is a pricing strategy designed to eliminate competition and monopolize the market.