The skill tools company has set a very low price for its chain saws with the intent to drive its competition out of business. It is using the illegal practice of?.

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04-11-2022
Business

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The skill tools company has set a very low price for its chain saws with the intent to drive its competition out of business. It is using the illegal practice of?.

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qwyellow qwyellow · Answer 1 · 2022-11-08T12:16:33-05:00

The skill tools company has set a low price for its chain saws with an intent to drive its competition out of business. It uses the illegal practice of predatory pricing.

Predatory pricing is defined as setting the prices of a product or service extremely low in comparison to other companies in market. It aims to eliminate the competition from market by lowering the price and attracting the consumers.

Predatory pricing is an illegal act and violates the Antitrust Laws. It could lead to monopoly in market. Consumers get temporary benefit from such low prices but it increases the threat of rising price once the competition is completely eliminated.

This will not leave any choice for the customer but to buy at whatever price the single firm decides.

Learn more about predatory pricing here https://brainly.com/question/13057117

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