Which of the following refers to the principle that unless barriers to entry or other factors make a market structurally conducive to monopolization,pricing below cost is not a Sherman Act violation,regardless of whether the defendant had monopolistic intent?
A) The principle of certainty
B) The principle of uncertainty
C) The rule of improbability
D) The rule of impossibility

Question

Quizplus · Accepted Answer

The principle described in the question is known as the "rule of impossibility." This rule states that unless a market is structurally conducive to monopolization, pricing below cost (or "predatory pricing") is not a violation of the Sherman Act, even if the defendant had monopolistic intent. The rule is based on the idea that it is impossible for a firm to successfully engage in predatory pricing in a market where barriers to entry are low and competitors can easily enter and undercut the predator's prices. Therefore, pricing below cost in such a market is not considered to be anticompetitive behavior.

Which of the Following Refers to the Principle That Unless