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Q. 29

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Principles of Economics

Found in: Page 273

Book edition 2nd

Author(s) David Shapiro and Steven Greenlaw

Pages 892 pages

ISBN 9781947172364

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Short Answer

Can you think of any examples of successful
predatory pricing in the real world?

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

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Step by Step Solution

TABLE OF CONTENTS :

TABLE OF CONTENTS

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.

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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