Predatory pricing refers to
A)the practice of charging a very low price for a product with the intent of driving competitors out of business.
B)a conspiracy among firms to set prices for a product.
C)using price differentials when charging different prices on the basis of race, religion, or ethnic affiliation.
D)using price differentials when charging the original price for refurbished goods that have been damaged or used and returned but repaired according to company specifications.
E)controlling agreements between independent buyers and sellers whereby sellers are required to not sell products below a minimum retail price.

Question

Quizplus · Accepted Answer

Predatory pricing is the practice of setting very low prices for a product with the intention of driving competitors out of the market. It is often used by large, established players to eliminate smaller competitors or new entrants. The low prices may not be sustainable in the long run, but they can be effective in the short term in driving competitors out of business. This can lead to a monopoly or near-monopoly situation, which allows the firm to raise prices and earn higher profits.

Predatory Pricing Refers to