Question

The practice of setting prices deliberately below ________ costs in an effort to drive a competitor out of the market is known as predatory pricing.

Answer 1

Answer:

c. average variable

Explanation:

The options for the question are;

. a) marginal

b. average total

c. average variable

d. average fixed

Predatory pricing can be regarded as

pricing strategy which is an illegal act whereby dominant firm in an particular industry set their price low so that compitition can be eliminated, this act usually aid Monopoly in the market. It should be noted that The practice of setting prices deliberately below average variable costs in an effort to drive a competitor out of the market is known as predatory pricing.