Asked by Katie Flynn on Jul 13, 2024
Verified
Predatory pricing
A) is often an inexpensive way for a large firm to drive smaller firms out of a market.
B) is usually quite effective at driving smaller firms out of a market.
C) is illegal under antitrust laws.
D) is a form of price leadership.
Predatory Pricing
A competitive strategy where a firm sets very low prices with the intention of driving competitors out of the market, or to prevent new entries.
Antitrust Laws
Regulations designed to promote competition and prevent monopolies by limiting the power of large corporations.
- Comprehend the idea and consequences of predatory pricing within market behaviors.
- Comprehend the legal perspective on practices such as predatory pricing, price-fixing, and cartel activities in relation to U.S. antitrust regulations.
Verified Answer
JS
Jenin ShajuJul 19, 2024
Final Answer :
C
Explanation :
Predatory pricing is illegal under antitrust laws because it involves setting prices low with the intent to eliminate competition, which can harm consumers in the long run by reducing choices and potentially leading to higher prices once competition is eliminated.
Learning Objectives
- Comprehend the idea and consequences of predatory pricing within market behaviors.
- Comprehend the legal perspective on practices such as predatory pricing, price-fixing, and cartel activities in relation to U.S. antitrust regulations.