________ occurs when a firm cuts prices below production costs in a deliberate attempt to drive competitors out of business.

Question

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Predatory pricing is the deliberate act of cutting prices below production costs in order to eliminate competition. This strategy is often used by dominant firms to drive out smaller competitors and maintain market power. It is illegal in many countries, including the United States, but can be difficult to prove in practice.

________ Occurs When a Firm Cuts Prices Below Production Costs