Final answer:
The strategy where Best Buy prices its audio system at $60 less than a competitor is known as competitive pricing. It's intended to offer customers a good deal and entice them away from competitors. This is distinct from predatory pricing, which aims to drive competitors out of the market by setting unsustainable low prices.
Step-by-step explanation:
The pricing strategy is described in the scenario where the Best Buy manager advertises a Pioneer audio system as being $60 less than Circuit City's price is commonly referred to as competitive pricing.
This strategy involves setting a product's price point based on what competitors are charging for a similar product, ensuring that the price is attractive enough to entice shoppers away from competitors. It's a way to signal to customers that they are getting a good deal by purchasing from Best Buy instead of Circuit City. This strategy often occurs in markets with high competition and where products are relatively similar.