Predatory Pricing Defined
Predatory pricing is also known as destroyer type pricing. Companies that use this method of pricing products at extremely low selling prices intend to drive out other competitors from the market or prevent them from entering the market. So other competitors can only survive in the market if they can match or lower their own prices without the risk of losing profits because such losses would result in going out of business. Most predatory pricing companies are either monopolies or just have less competitors in their industry or market. Sometimes they may even raise prices to cause the opposite affect, but still make profit making hard for their competitors.