Although the practice of predatory pricing is a common claim in antitrust suits, some economists are skeptical of this argument because they believe A. the evidence of its practice is nearly impossible to collect. B. predatory pricing actually attracts new firms to the industry. C. predatory pricing is not a profitable business strategy. D. even though predatory pricing is a profitable business strategy, it is on balance beneficial to society.

Question

Business

Tippy

28 May, 17:48

Although the practice of predatory pricing is a common claim in antitrust suits, some economists are skeptical of this argument because they believe A. the evidence of its practice is nearly impossible to collect. B. predatory pricing actually attracts new firms to the industry. C. predatory pricing is not a profitable business strategy. D. even though predatory pricing is a profitable business strategy, it is on balance beneficial to society.

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Answers (1)

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Lucian Mckay · Answer 1

C. predatory pricing is not a profitable business strategy.

Explanation:

However, even though they are not a profitable business strategy, they can lead to a monopoly system. When a company enters predatory pricing, it is selling products for a price that no competitor can match, because they are usually cheaper than the cost to make it. If a company can sustain a predatory system for a while, it will be the only one left in the market. Being, in that way, the mono player, could raise the price to recoup its loss, even though this is a very dangerous business move.