Question

Predatory pricing refers to a. All of the above are examples of predatory pricing. b. a firm selling certain products together rather than separately. c. firms colluding to set prices. d. a monopoly firm reducing its price in an attempt to maintain its monopoly.

Answer 1

Answer:

d. a monopoly firm reducing its price in an attempt to maintain its monopoly.

Explanation:

In a competitive system, a firm practices predatory pricing when it charges prices below its costs in order to eliminate competitors. When the prevailing system is a monopoly, the firm is the only company providing the good and it can practice predatory pricing in the short term to prevent a competitor from entering the market. Thus the firm remains monopolistic.