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Chapter 11: Q. 29 (page 273)

Can you think of any examples of successful

predatory pricing in the real world?

Short Answer

Expert verified

To gain control of the market, Amazon.com employed predatory pricing.

Step by step solution

01

Step 1. Introduction

Predatory Pricing: It is a pricing strategy in which a corporation lowers its price to the point where competitors are forced to exit the industry owing to a lack of consumers.

02

Step 2. Explanation

Amazon.com is a real-life example of a super-supplier of both printed and electronic books. It sells books at a lower cost than the current market pricing, and it doesn't even charge for delivery. The publishing business had been damaged by this. Amazon has a market share of about $90 billion dollars in the business. Because authors have no other location to publish their work, Amazon has offered them a little sum. As a result, new industries left the market.

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