BigWheels, Inc. put all of their premium tires on sale at a severely discounted price. This put both competing tire companies out of business. BigWheels then sharply increased their prices. This is considered ________.

A) competitive pricing
B) predatory pricing
C) purposeful pricing
D) predominant pricing
E) preeminent pricing

Question

Abdul Naseer Al-Maashari · Accepted Answer

Final Answer : B, Explanation :  Predatory pricing is a strategy where a company sets very low prices with the intent to eliminate competition, and then raises prices once competitors have been driven out of the market. This is what BigWheels, Inc. did by severely discounting their premium tires to put competitors out of business, and then increasing their prices sharply afterwards.

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