Predatory pricing can occur in a monopoly market because:
A) the firm has no potential competitors to stop it doing so.
B) the firm wishes to create an entry barrier for the potential entrants.
C) the government has a tax incentive to let it happen.
D) the monopolist is trying to maximise short-term profits.

Question

Quizplus · Accepted Answer

Predatory pricing in a monopoly market is used as a strategy to create barriers for potential entrants by setting prices low enough to deter new competitors from entering the market.

Predatory Pricing Can Occur in a Monopoly Market Because