Question

John's Mattresses is now selling its products in Spain. It has priced its line of mattresses very low in the hopes that it will drive away weaker competitors. This is an example of:________

Answer 1

Answer: predatory pricing.

Explanation:

John's Mattresses is now selling its products in Spain. It has priced its line of mattresses very low in the hopes that it will drive away weaker competitors. This is an example of predatory pricing.

Predatory pricing is when a company intentionally reduces its price in order to reduce competition. It should be noted that this can lead to monopoly and it violated the antitrust law.