A large software company released its web browser for free.As a result, other smaller software companies were forced to reduce their price significantly and went out of business.This is an example of:
A)bid rigging.
B)bait-and-switch.
C)predatory pricing.
D)referral selling.
E)pyramid selling.

Question

Quizplus · Accepted Answer

The scenario described is an example of predatory pricing, which is the practice of setting prices low to drive competitors out of business and then raising prices once they have exited the market. The large software company's decision to release their web browser for free forced smaller companies to reduce their prices significantly, and ultimately resulted in their going out of business. This is a classic example of predatory pricing.

A Large Software Company Released Its Web Browser for Free