When an oligopoly reduces its price with the intent of driving away its competitors,it is said to be engaging in
A) pricing differential.
B) predatory pricing.
C) price fixing.
D) a price-tying agreement.
E) price discrimination.

Question

Quizplus · Accepted Answer

Predatory pricing is a pricing strategy used by dominant firms to drive away competitors by pricing their products or services at a very low level. This strategy allows the dominant firm to increase its market share, which can later be used to increase prices and gain higher profits.

When an Oligopoly Reduces Its Price with the Intent of Driving