Predatory pricing

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Predatory pricing is when an existing firm uses sharp but temporary price cuts to discourage new competition.

Definition

According to Principles of Economics by Timothy Taylor (3rd edition),

Predatory pricing. When an existing firm uses sharp but temporary price cuts to discourage new competition.

According to Cost Accounting by Horngren, Datar, Rajan (14th edition),

Predatory pricing. Company deliberately prices below its costs in an effort to drive out competitors and restrict supply and then raises prices rather than enlarge demand.
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