In predatory pricing,large retailers attempt to destroy smaller retailers by ________.
A) vertical integration
B) conspiring with manufacturers to refuse to sell to smaller retailers
C) selling goods at very low prices (sometimes even below cost)
D) providing free warranties with selected goods

Question

Quizplus · Accepted Answer

Predatory pricing involves selling goods at very low prices, which can be below the cost of production, in order to drive small retailers out of the market. This strategy allows larger retailers to eventually increase prices and gain a larger market share once their competitors have been eliminated. Vertical integration and providing free warranties are not direct tactics used in predatory pricing, and conspiring with manufacturers to refuse to sell to smaller retailers would be illegal under antitrust laws.

In Predatory Pricing,large Retailers Attempt to Destroy Smaller Retailers by ________