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

Question

Quizplus · Accepted Answer

Lofonift Inc. used predatory pricing by initially pricing their MP3 player very low to eliminate competition and then raised the price once its competitors were out of business.