Question

Penny Bank, a discount store, is highly competitive. When entering a new market, Penny Bank often cuts prices so deeply that it sells below costs, effectively pushing smaller retail stores with less purchasing power out of the market. In this case, Penny Bank is using ________. Group of answer choices cost-plus pricing market skimming deceptive pricing predatory pricing psychological pricing

Answer 1

Answer:

predatory pricing

Explanation:

Based on the scenario being described within the question it can be said that in this case, Penny Bank is using predatory pricing. This is an approach to pricing in which a company lowers prices to really low levels in order to steal customers from their competitors and drive out the new competitors from the market, since they will not be able to match or sustain those low prices and will eventually go bankrupt.