Predatory pricing involves a firm
A)colluding with another firm to restrict output and raise prices.
B)selling two individual products together for a single price rather than selling each product individually at separate prices.
C)temporarily cutting the price of its product to drive a competitor out of the market.
D)requiring that the firm reselling its product do so at a specified price.

Question

Quizplus · Accepted Answer

Predatory pricing involves a firm temporarily cutting the price of its product below cost or normal profit levels to drive a competitor out of the market, after which it raises prices to recoup losses and gain a monopoly position. Collusion with another firm is price-fixing, selling two products together for a single price is bundling, and requiring reselling at a specified price is resale price maintenance.

Predatory Pricing Involves a Firm