Predatory pricing refers to the case in which a firm produces a level of output where marginal cost is equal to marginal revenue and charges a price such that demand exceeds supply.

Question

Quizplus · Accepted Answer

Predatory pricing refers to the strategy where a firm deliberately sets its prices below cost with the intention of driving competitors out of the market. It does not specifically relate to producing at a level where marginal cost equals marginal revenue, nor does it involve setting prices to create excess demand over supply.

Predatory Pricing Refers to the Case in Which a Firm