What is predatory pricing?

What is predatory pricing?

Predatory pricing is an anti-competitive practice or strategy to drive out potential competitors from the market. The marketer charges exceptionally low prices for his products and services to eliminate any existing competition or to create market entry barriers for new firms. The firm intends to create monopoly in the market via this kind of practice. However this kind of pricing policy is rare to be found in the market as there are laws prohibiting such practices by firms.