The Economics of Predatory Pricing

Predatory pricing of economics Introductory pricing asserts that "enterprises set the price of a product below a certain cost and lose revenue in a short period of time to let the competitors go out of business" ing. 164)). The reason why companies suffer losses in a short period of time is because we want to drive out competitors and raise prices to the monopoly level. By doing so, they will be subject to short-term losses and will have greater benefits in the long term than if they do not use predation strategies (Sheffert).

If we learn something from economics, we know that predatory pricing is the main factor in antitrust law. Predatory pricing involves a sharp price cut that weakens the competitor's price, even though it means short-term price cuts will lose money. The company expects that lowering the price lower than competitors will put pressure on competition and shut down competitors. As Amazon's effect proves, SMEs will be seriously affected by these actions. SMEs can not compete with such large companies. Large enterprises become large scale and expel competitors, large companies basically monopolize and have the right to determine the price of their products. In the short term, consumers may think that low prices are beneficial. However, due to lack of competition, the long-term impact is devastating

Predatory pricing of economics Introductory pricing asserts that "enterprises set the price of a product below a certain cost and lose revenue in a short period of time to let the competitors go out of business" ing. 164)). The reason why companies suffer losses in a short period of time is because we want to drive out competitors and raise prices to the monopoly level. - Behavioral economics is the influence of research psychology on economic decision making. This is often people thinking and feelings when using money for specific goods and services. The great economist Adam Smith was the first follower of his book 'Theory of moral sentiment' dating back to 1759. But it took more than 100 years to get a clearer understanding of how psychology works. Buyers play the role of economics