Question

There are two shoe stores in a small town. store a is selling a pair of running shoes for $39.50. if it costs store a $40 to order this pair of shoes from the factory, then what is store a doing?

Answer 1

Practicing predatory pricing.

Predatory pricing is the price of goods or services at a low level where other supplies can not compete. If suppliers are unable to compete they will eventually leave the market due to the inability to sell their product.

Answer 2

This store is practicing predatory pricing.