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Predatory pricing is a competitive strategy where a company sets its prices extremely low, often below cost, to drive competitors out of the market or deter new entrants. The goal is to gain market share by creating a financial strain on rivals, ultimately allowing the predator to raise prices once competition is diminished. This practice is considered anti-competitive and is subject to legal scrutiny in many jurisdictions. However, proving predatory pricing can be complex, as it requires demonstrating both intent and the ability to recoup losses after competitors have exited the market.

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What is perdatory pricing?

Predatory means "in the manner of a predator." Predatory pricing is designed to drive competitors out of business by pricing so low that the competition can't compete.


Do economists all agree that predatory pricing exists and is a common practice?

False, economists do not all agree that predatory pricing exists and is a common practice.


What does predatory pricing mean?

The pricing of goods or services at such a low level that other suppliers cannot compete and are forced to leave the market


What are the advantages and disadvantages of Predatory Pricing?

The pricing of goods or services at such a low level that other suppliers cannot compete and are forced to leave the market.


What are the different pricing methods in international marketing?

Bid Pricing Cost Plus Pricing Customary Pricing Differential Pricing Diversionary Pricing Dumping Pricing Experience Curve Pricing Loss Leader Pricing Market Pricing Predatory Pricing Prestige Pricing Professional Pricing Promotional Pricing Single Price for all Special Event Pricing Target Pricing


How does predatory pricing affect markets?

Predatory pricing occurs when a company sets prices extremely low with the intent to eliminate competition, often leading to market dominance. This practice can harm smaller competitors who cannot sustain losses and may eventually lead to their exit from the market. Once the competition is reduced, the predatory firm may raise prices to recoup losses, potentially harming consumers in the long run. Overall, predatory pricing undermines fair competition and can lead to monopolistic market structures.


What does predatory pricing involve?

A large company charging below its production cost in order to eliminate competition


Who is the government attempting to help by discouraging predatory pricing?

Ultimately, the government is trying to protect the consumer. Predatory pricing is used to drive a competitor out of a market, or keep a potential competitor from entering a market. If successful, the entity employing predatory pricing tactics can maintain a monopoly (or near monopoly) in a market and use the lack of competition to set prices anywhere it wants. The consumer, having no choice in a marketplace, is forced to pay whatever the entity chooses to charge.


The market price may be an inappropriate transfer price if?

competitor s are practicing predatory pricing to eliminate competitor


What did the government claim Microsoft did to illegally extend its control over the market?

It had used predatory pricing to drive competitors out of business


What did the government claim Microsoft did to illegally extend it control over the market?

It had used predatory pricing to drive competitors out of business


What did the government claim Microsoft to illegally extend its control over the market?

It had used predatory pricing to drive competitors out of business