Predatory Pricing Is a Strategy

question 25

Multiple Choice

Predatory pricing is a strategy:

• A) whereby an incumbent maintains a price below the monopoly level to prevent entry by potential competitors.
• B) whereby a firm enjoys lower costs due to knowledge gained from its past production decisions.
• C) whereby a firm temporarily prices below its marginal cost to drive competitors out of the market.
• D) used by a vertically integrated firm to squeeze the margins of its competitors.

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