In order to prove that a firm has engaged in predatory pricing, the Justice Department must show that the firm's price is below

Question

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The Justice Department typically needs to demonstrate that the firm's price is below its average variable cost to prove predatory pricing. This is because selling below average variable cost suggests that the firm is not covering its short-term operational costs, implying an intent to eliminate competition rather than operate profitably.

In Order to Prove That a Firm Has Engaged in Predatory