If a large retailer sold numerous items below cost with the intention of punishing small competitors and gaining higher long- run profits by putting those competitors out of business,the retailer would be guilty of .
A)price fixing
B)penetration pricing
C)discriminatory pricing
D)price collusion
E)predatory pricing

Question

Quizplus · Accepted Answer

Predatory pricing is the practice of selling goods or services at a price below their actual cost to drive competitors out of the market, and once the competition is eliminated, the company raises prices to gain higher long-run profits. This practice is illegal under antitrust laws because it harms competition in the market.

If a Large Retailer Sold Numerous Items Below Cost with the Intention