Search results
Results from the WOW.Com Content Network
Predatory pricing is a commercial pricing strategy which involves the use of large scale undercutting to eliminate competition. This is where an industry dominant firm with sizable market power will deliberately reduce the prices of a product or service to loss-making levels to attract all consumers and create a monopoly. [1]
Predatory pricing, also known as aggressive pricing (also known as "undercutting"), intended to drive out competitors from a market. It is illegal in some countries. Companies or firms that tend to get involved with the strategy of predatory pricing often have the goal to place restrictions or a barrier for other new businesses from entering ...
Anti-competitive behavior can be grouped into two classifications. Horizontal restraints regard anti-competitive behavior that involves competitors at the same level of the supply chain. These practices include mergers, cartels, collusions, price-fixing, price discrimination and predatory pricing.
Eventually, seven publishers entered consent decrees to stop predatory pricing, and Penguin paid $25 million to independent bookstores when it continued the illegal practices. [17] In 1998, the ABA (which represented 3500 bookstores) and 26 individual stores filed suit in Northern California against chain stores Barnes & Noble and Borders ...
Dumping, in economics, is a form of predatory pricing, especially in the context of international trade.It occurs when manufacturers export a product to another country at a price below the normal price with an injuring effect.
Taken to the extreme, penetration pricing is known as predatory pricing, when a firm initially sells a product or service at unsustainably low prices to eliminate competition and establish a monopoly. In most countries, predatory pricing is illegal, but it can be difficult to differentiate illegal predatory pricing from legal penetration pricing.
Predatory pricing: One firm substantially reduces its prices for a sustained period below its own cost of supply in an attempt to reduce market competition. [9] Predatory pricing on the international market is called dumping. That is, when a foreign company sells a product in a domestic market at a price below market value, and in doing so ...
In theory predatory pricing happens when large companies with huge cash reserves and large lines of credit stifle competition by selling their products and services at a loss for a time, to force their smaller competitors out of business. With no competition, they are then free to consolidate control of the industry and charge whatever prices ...