Because the efficiency benefits of large retailers can be passed on to consumers in the form of lower prices and because a competitive market should drive out uncompetitive firms, there is no persuasive rationale for claiming that it is unethical and unfair to force smaller stores out of businesses by temporarily pricing products under cost.

Question

Quizplus · Accepted Answer

The practice of pricing products below cost to drive smaller competitors out of business, known as predatory pricing, can be considered unethical and unfair because it manipulates market conditions and consumer choice, potentially leading to a monopoly or oligopoly where the larger retailer can then raise prices due to reduced competition. This undermines the principles of a fair and competitive market.

Because the Efficiency Benefits of Large Retailers Can Be Passed