Question

A firm that opens new stores in a community and sets artificially low prices with the sole purpose of driving competing stores in the area out of business is said to engage in a type of behavior called ______ pricing.

Answer 1

The correct answer is: Predatory

Step-by-step explanation:

To begin with, in the field of marketing and business management the term known as "Predatory Pricing" refers to the strategy of incorporing a very low price from a large company into a new market in order to try to eliminate the competitors by pushing them to leave the industry due to the inability of competing with those prices. Therefore that this technique focus on the reduction of the price of the product as mach as possible and later when the other competitors are out of business then the company will start to rise its prices.