Savings for You, a discount retail chain, is highly competitive. When entering a new market, Savings for You often cuts prices so deeply that it sells below costs, effectively pushing smaller companies with less purchasing power out of the market. Savings for You is most at risk of being accused of ________.
A)market skimming
B)price-fixing
C)predatory pricing
D)deceptive pricing
E)price confusion

Question

Quizplus · Accepted Answer

Predatory pricing is a strategy in which a company intentionally sets low prices to drive competitors out of the market. This is illegal in many countries, including the United States, as it can lead to unfair competition and monopolies. Savings for You's pricing strategy of selling below costs fits this definition and puts the company at risk of being accused of predatory pricing.

Savings for You, a Discount Retail Chain, Is Highly Competitive