Definition of Predatory pricing:
Practice of temporarily selling below survival prices or giving goods away (as in software industry) to undermine or eliminate the existing competition. Predatory pricing is an abuse of dominant position, and is illegal in several countries. Compare with preemptory pricing.
However, allegations of this practice can be difficult to prosecute because defendants may argue successfully that lowering prices are part of normal competition, rather than a deliberate attempt to undermine the marketplace. And predatory pricing isn't always successful in its goal, because of the difficulties in recouping lost revenue and successfully eliminating competitors.
Predatory pricing is the illegal act of setting prices low in an attempt to eliminate the competition. Predatory pricing violates antitrust law, as it makes markets more vulnerable to a monopoly.
The pricing of goods or services at such a low level that other suppliers cannot compete and are forced to leave the market.
How to use Predatory pricing in a sentence?
- Prosecutions for predatory pricing have been complicated by the short-term consumer benefits and the difficulty of proving the intent to create a market monopoly.
- The gas station was selling gas at $1.90 a gallon when the other stations were selling it for $2.20 a gallon in an act of predatory pricing for which they were fined and reprimanded.
- In a predatory pricing scheme, prices are set low in an attempt to drive out competitors and create a monopoly.
- The predatory pricing strategy undertaken by the huge firm put the competition out of business, then they raised their prices.
- Consumers may benefit from lower prices in the short term, but they suffer if the scheme succeeds in eliminating competition, causing a rise in prices and a decline in choice.
- I knew that wal mart was into some predatory pricing strategies in order to completely obliterate their opponents from the playing field.
- A wide variety of business practices can run afoul of Section 2, including everything from forcing business partners to sign exclusive contracts to predatory pricing.
Meaning of Predatory pricing & Predatory pricing Definition