PlusLight, a torch manufacturing company, releases high-intensity torches at incredibly low prices.Within a year, it achieves market monopoly by driving away most of its competitors from business.Which of the following practices did PlusLight engage in?
A)Predatory pricing
B)Price fixing
C)Price discrimination
D)Bid rigging
E)Resale price maintenance

Question

Quizplus · Accepted Answer

PlusLight engaged in predatory pricing, which involves setting prices so low that it drives competitors out of business. This allowed PlusLight to achieve market monopoly. Price fixing involves colluding with competitors to set prices at a certain level, while price discrimination involves charging different prices to different customers. Bid rigging is when companies collude to lower competition in the bidding process, and resale price maintenance involves setting a minimum price for retailers to sell products.

PlusLight, a Torch Manufacturing Company, Releases High-Intensity Torches at Incredibly