Is price undercutting illegal?
Isn’t this illegal? A: Pricing below a competitor’s costs occurs in many competitive markets and generally does not violate the antitrust laws. Sometimes the low-pricing firm is simply more efficient.
What do you mean by predatory pricing?
Predatory pricing is a deliberate strategy, usually by a dominant firm, of driving competitors out of the market by setting very low prices or selling below the firm’s incremental costs of producing the output (often equated for practical purposes with average variable costs).
What is predatory pricing and when is it illegal?
After chasing competitors out of the market, the incumbent would have fewer competitors (and may in fact be a monopoly), and can then – in theory – raise prices above what the market would otherwise bear. In many countries, predatory pricing is considered anti-competitive and is illegal under competition laws.
What is predatory dumping?
Predatory dumping is a type of anti-competitive behavior in which a foreign company prices its products below market value in an attempt to drive out domestic competition. Over time, outpricing peers can help the company to create a monopoly in its targeted market.
What replaced the Sherman Antitrust Act?
Clayton Antitrust Act, law enacted in 1914 by the United States Congress to clarify and strengthen the Sherman Antitrust Act (1890). Woodrow Wilson asked for a drastic revision of existing antitrust legislation, Congress responded by passing the Clayton measure.
What is price skimming?
Price skimming is a product pricing strategy by which a firm charges the highest initial price that customers will pay and then lowers it over time.
What is collusive pricing?
Collusion occurs when entities or individuals work together to influence a market or pricing for their own advantage. Acts of collusion include price fixing, synchronized advertising, and sharing insider information.
What is federal antitrust laws?
What Are Antitrust Laws? Antitrust laws also referred to as competition laws, are statutes developed by the U.S. government to protect consumers from predatory business practices. They ensure that fair competition exists in an open-market economy.
What is WTO stand on dumping?
Dumping in the GATT/WTO Dumping is, in general, a situation of international price discrimination, where the price of a product when sold in the importing country is less than the price of that product in the market of the exporting country.
What is persistent dumping?
Persistent dumping When a country consistently sells products at a lower price in the foreign market than the local prices, it is called persistent dumping. It happens when there is a constant demand for the product in the foreign market.
What are the three major antitrust laws?
The core of U.S. antitrust law was created by three pieces of legislation: the Sherman Antitrust Act, the Federal Trade Commission Act, and the Clayton Antitrust Act.
What is the difference between a supermarket and a department store?
Almost same as department store but at a cheaper price. A retail store which generally sells food products and household items, properly placed and arranged in specific departments is called a supermarket. A supermarket is an advanced form of the small grocery stores and caters to the household needs of the consumer.
Why do consumers prefer to shop in department stores?
In a department store, the consumers can get almost all the products they aspire to shop at one place only. Department stores provide a wide range of options to the consumers and thus fulfill all their shopping needs.
How important is the location of a retail store to performance?
Research on retailing typically attributes the success of a store to its location. At the same time, marketing experts have focused a great deal of attention on the role of pricing in store performance, but without considering location.
Which retailers have the worst always-on-sale practices?
Sears had what Checkbook called “the most egregious always-on-sale practices.” Eight out of nine items tracked, were almost or always on sale. Two were on sale 44 out of 44 weeks. Kohl’s had eight of the nine items checked on sale more than half the time during the 44-week survey period. Four were always or almost always offered at sale prices.