An Analysis of Predatory Pricing in India
The traditional predatory pricing theory is simple to understand. The predator is one who lowers its prices for a sufficiently long period of time such that its competitors leave. The predator can be an existing player or a new entrant with sufficient capital. This practice also deters others from entering the market. Assuming that both the predator and the prey are equally efficient firms, this implies that both the predator and the prey have suffered losses and that these losses are substantial.
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