Predatory Pricing

A method of pricing in which a seller sets a price so low that other suppliers cannot compete and are forced to exit the market.

Deeper Insights

Predatory pricing, not only causes others to leave the market, but it also restricts entry for others. Since this is the purpose of predatory pricing, it is banned in many places because it is considered a violation of competition laws. However, in many cases it is difficult to prove a business is actively trying to implement predatory pricing rather than just partaking in normal competition.

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Related Keywords: Pricing, Underpricing, Penetration Pricing, Psychological Pricing