A prominent fast-food chain sets a very low price for its burgers with the intent of driving its competition out of business.This is an example of:
A)predatory pricing.
B)vertical price fixing.
C)horizontal price fixing.
D)price discrimination.
E)bait and switch.

Question

Quizplus · Accepted Answer

Predatory pricing is the tactic of setting very low prices with the intention of driving out competitors. This allows the dominant company to gain a large market share and eventually raise prices to increase profits. The other options (vertical price fixing, horizontal price fixing, price discrimination, bait and switch) are all different pricing strategies that involve collusion, discrimination, or deception.

A Prominent Fast-Food Chain Sets a Very Low Price for Its