A small hardware store files a complaint with the Competition Bureau concerning alleged predatory pricing practices of a mega-retailer of hardware in the same market. Chances are that there will not be a conviction because
A) it is likely that the small hardware store owner is reacting emotionally, not rationally, to increased competition.
B) the megastore probably has access to better legal representation.
C) there is a huge backup in the department of similar complaints and chances of this complaint being heard are slim.
D) it is unlikely that the mega-retailer would need to use such a tactic to steal market share.
E) it is difficult to prove that the prices are unreasonably low, especially since the megastore can take advantage of cost reductions resulting from economies of scale.

Question

Quizplus · Accepted Answer

It is difficult to prove predatory pricing because the mega-retailer can justify low prices through economies of scale, making it challenging to demonstrate that prices are unreasonably low with the intent to eliminate competition.

A Small Hardware Store Files a Complaint with the Competition