Question

The sale of goods or provision of services, at a price which is below the cost, as may be determined by regulations, of production of the goods or provision of services, with a view to reduce competition or eliminate the competitors, is called _______________.

• A. Dominant Position
• B. Tie-in Arrangement
• C. Predatory Price
• D. Resale price Maintenance

Hint:

Think of "Predatory" pricing like a predator hunting its prey. The big company (predator) attacks smaller rivals (prey) with unsustainably low prices to "kill" the competition.

Answer 1

The Correct Option is C

The definition provided in the question is the classic definition of Predatory Pricing.
Under the Competition Act, 2002, this is considered an abuse of dominant position.
It is an anti-competitive strategy where a dominant company deliberately sells its products or services at a price below its cost of production.
The goal is to incur short-term losses to drive smaller competitors out of the market.
Once the competition is eliminated, the dominant firm can raise its prices to monopoly levels to recoup its losses and earn higher profits.