They were successful in creating monopoly power, as Darlington Transport Company went out of business.
PREDATORY PRICING DRIVERS
Not only did they offer free travel, but they also attracted bus drivers from their rival by paying higher wages. Busways (a new entrant into the bus market) offered free bus rides to try and force their competitor, Darlington Transport Company, out of business. There are a number of predatory pricing examples which can be drawn upon, including the 1994 Darlington bus wars. Penetration pricing, for instance, involves lowering prices by a small percentage for a short amount of time to capture a larger market share. There are various examples of price-lowering strategies which aren’t illegal. If a pricing strategy is set lower for reasons other than eliminating rivals, then pricing is not considered predatory. Pricing is only considered predatory if its goal is to price competitors out of the market. However, it can be hard to prosecute companies for predatory pricing due to the difficulty of distinguishing between fair competitive pricing and illegal predatory pricing. Predatory pricing is a deliberate act of selling goods at a loss in order to force competition out of the market. Want to know more? Explore everything you need to know with our guide to predatory pricing, right here.
Predatory pricing is an illegal practice of deliberately using low prices to eliminate the competition and create a monopoly.
0 kommentar(er)
