A strategy to intentionally sell below cost to push a competitor out of a market, then raise prices to new highs, is called ________.
A) price-fixing
B) price discrimination
C) deceptive pricing
D) bait and switch
E) predatory pricing

Question

Quizplus · Accepted Answer

This is a classic example of predatory pricing, where a company intentionally sells products at a loss to drive their competition out of business. After establishing a monopoly, they can then raise prices to recoup their losses and increase profits. This practice is illegal in many countries as it harms consumers by limiting their choices and can result in higher prices in the long run.

A Strategy to Intentionally Sell Below Cost to Push a Competitor