A company engages in predatory pricing when it deliberately prices below its costs in an effort to drive competitors out of the market and restrict supply, and then raises prices rather than enlarge demand.

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Predatory pricing is a strategy used by some companies to eliminate competition by lowering prices below their costs. This can make it difficult for smaller competitors to keep up and force them out of the market. Once the competition is eliminated, the larger company can then raise its prices to increase its profits. This is known as price gouging and can be harmful to consumers and the market overall.

A Company Engages in Predatory Pricing When It Deliberately Prices