Final answer:
The phase-out approach to product deletion involving continuous price increases is false. This strategy typically entails reducing the product's market presence in various ways, contrasting with predatory pricing.
Step-by-step explanation:
The statement that the phase-out approach to product deletion involves a process of continuous price increases to make as much profit as possible before the product is finally priced out of existence is False. Instead, a phase-out approach typically would involve gradually reducing the product's presence in the market, possibly by lowering the price to clear out inventory, reducing promotional efforts, or limiting its distribution. This strategy allows for the recovery of any remaining value in the product before it's discontinued. It is different from predatory pricing, where firms may set prices below cost to drive out competition, with the intent to raise prices later. In a monopolistically competitive market environment, firms respond to profits through entry and exit, with the long-run equilibrium resulting in firms earning zero economic profits.