Setting a price so low that competitors are driven out of a market and then boosting the price is called
A) predatory pricing.
B) a tying arrangement.
C) resale price maintenance.
D) price fixing.
E) price discrimination.

Question

Quizplus · Accepted Answer

Predatory pricing involves setting a price so low that competitors are forced out of the market. Once these competitors have been driven out, the firm can then increase prices to a higher, more profitable level. This practice is illegal in many countries as it is seen as anti-competitive behavior.

Setting a Price So Low That Competitors Are Driven Out