Which of the following conditions may make predatory pricing by incumbents rational?
A)When entry costs are very high
B)When entrants are uncertain about market conditions
C)When existing firms have significant coast advantages
D)When entrants are required to obtain extensive licensing and regulatory approvals
E)When exiting firms have increasing marginal revenue

Question

Quizplus · Accepted Answer

Predatory pricing can be rational when entrants are uncertain about market conditions, as it can deter entry by making the market appear less profitable.

Which of the Following Conditions May Make Predatory Pricing by Incumbents