For _____ to work,the firm must normally have a profitable position in another national market,which it can use to subsidize aggressive pricing in the market it is trying to monopolize.

Question

Quizplus · Accepted Answer

Predatory pricing refers to aggressive pricing which aims to drive out competitors from the market. In order for predatory pricing to be successful, the firm must have a profitable position in another national market, which it can use to subsidize the aggressive pricing in the market it is trying to monopolize. Multipoint pricing refers to the strategy of setting different prices in different markets, value-based pricing refers to pricing based on the perceived value to the customer and experience curve pricing is a strategy of reducing prices as the firm gains more experience in producing a product. None of these options are directly relevant to the condition mentioned in the question. Therefore, the best choice is D.

For _____ to Work,the Firm Must Normally Have a Profitable