When a firm prices its goods below the marginal cost to drive away competitors,it is referred as
A)price skimming.
B)limit pricing.
C)penetration pricing.
D)predatory pricing.

Question

Quizplus · Accepted Answer

Predatory pricing is the practice of deliberately pricing products or services below their cost of production or below the market price, with the intention of driving competitors who cannot match the low price out of business. This ultimately leads to reduced competition and a higher market share for the predatory firm.

When a Firm Prices Its Goods Below the Marginal Cost