An established provider of high-definition television service does not like the new startup that has decided to offer HD television in the same market area.As such,the established provider lowers their prices to half of what the new startup is charging,in hopes of forcing them into bankruptcy.This activity is known as:
A)Price fixing
B)Price discrimination
C)Predatory pricing
D)Deceptive pricing

Question

Quizplus · Accepted Answer

Predatory pricing is a strategy used by dominant firms to drive competitors out of business by lowering prices to unsustainable levels. The established provider is offering prices below the cost of providing the service, which may lead to bankruptcy for the new startup. This is an example of predatory pricing. Price fixing is an agreement between competing firms to set prices to achieve higher profits, while price discrimination involves charging different prices to different groups of customers based on their willingness to pay. Deceptive pricing involves misleading customers about the actual prices of goods or services.

An Established Provider of High-Definition Television Service Does Not Like