Effects of Predatory Pricing on Competition
Earlier
theory defines Predatory Pricing as an illegal act of setting prices low in an
attempt to eliminate the competitors / drives the competitor out of the market.
Predatory pricing makes the market more vulnerable to a monopoly.
“The Competition Act, 2002 outlaws predatory pricing, treating it as an
abuse of dominant position, prohibited under Section 4.”
On a contrary, new theories also argue that
predatory pricing is also a rational activity, they also tries to explain them
with a model.
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