Question 1
________ occurs when a large, powerful firm drives smaller firms out of the market by temporarily selling at an artificially low price.
◦ A dominant strategy
◦ A prisoners' dilemma
◦ A maximin strategy
◦ Predatory pricing
Question 2
Predatory pricing is
◦ often effective and a relatively inexpensive means of eliminating competition.
◦ legal under the U.S. antitrust laws.
◦ the practice by which a large, powerful firm attempts to drive its competitors out of the market by temporarily setting an artificially low price.
◦ generally more effective when barriers to entry exist.