In Which of the Following Scenarios Would a Predatory Pricing

question 62

Multiple Choice

In which of the following scenarios would a predatory pricing scheme have the greatest chance of success,all else constant?

• A)The predatory price is set well below cost, many rivals are likely to enter after the strategy ends, and profits can be recouped only over a relatively long period of time.
• B)The predatory price is set well below cost, relatively few rivals are likely to enter after the strategy ends, and profits can be recouped in a relatively long period of time.
• C)The predatory price is set just below cost, many rivals are likely to enter after the strategy ends, and profits can be recouped in a moderate period of time.
• D)The predatory price is set just below cost, relatively few rivals are likely to enter after the strategy ends, and profits can be recouped in a very short period of time.

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