A strategy to intentionally sell below cost to push a competitor out of a market,then raise prices to new highs is called __________________.

Question

Quizplus · Accepted Answer

A strategy to intentionally sell below cost to push a competitor out of a market, then raise prices to new highs is called predatory pricing. Predatory pricing is illegal but prosecuting it can be very tricky because intent must be proved. Other plausible explanations exist for drastic price reductions including inventory overstocks, so proving that predatory pricing has occurred is difficult.

A Strategy to Intentionally Sell Below Cost to Push a Competitor