Question

When Lofonift Inc. introduced its flagship product, an MP3 player, it captured the MP3 player market by offering its product at the lowest price in the market. This gradually forced many of its competitors out of business. Once its competitors were out of business, Lofonift Inc. raised its prices. In this scenario, Lofonift Inc. most likely indulged in _____.

Answer 1

Answer: predatory pricing  

       

Explanation:  In simple words, it refers to a pricing strategy in which the organisation price its goods very low with the objective of capturing the whole market and forcing to leave the other competitors.

In the given case, Lofonitt captured the mp3 market by offering lower price [products leading to failure of their competitors.

Hence we can conclude that they were indulged in predatory pricing.