Pennies (a grocery chain) opened next door to the established low cost grocery chain Price Busters. Price Busters lowered their prices to a level at which Pennies could not compete. Once Pennies was driven out of business, Price Busters increased their prices again. What is this strategy called?
A)price fixing
B)predatory pricing
C)bait and switch
D)deceptive pricing

Question

Quizplus · Accepted Answer

This strategy is called predatory pricing, where a company lowers its prices to drive out competitors and then raises them again once the competition is eliminated.

Pennies (A Grocery Chain) Opened Next Door to the Established