Although the practice of predatory pricing is a common claim in antitrust suits, some economists are skeptical of this argument because they believe
A)the evidence of its practice is nearly impossible to collect.
B)predatory pricing is not a profitable business strategy.
C)even though predatory pricing is a profitable business strategy, it is on balance beneficial to society.
D)predatory pricing actually attracts new firms to the industry.

Question

Quizplus · Accepted Answer

Some economists argue that predatory pricing is not a profitable business strategy in the long run because the price cuts needed to drive out competitors will eventually lead to reduced profits. Additionally, there is often uncertainty about how long it will take for a predator to recoup its losses and recapture the market share it lost during the predatory pricing period. Therefore, predatory pricing may not be as common as some antitrust suits suggest.

Although the Practice of Predatory Pricing Is a Common Claim