Entry into a market can be deterred by practicing limit pricing.

Name: Entry into a market can be deterred by practicing limit pricing.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Limit pricing is a strategy where an incumbent firm sets a low price to discourage new entrants from entering the market. The low price makes it difficult for new entrants to break even and cover their costs, thus deterring entry. Therefore, practicing limit pricing can deter entry into a market.

Entry into a Market Can Be Deterred by Practicing Limit