Provide examples of predatory pricing in the market.

Predatory pricing refers to a strategy employed by dominant firms in a market to drive out competition by temporarily setting prices below their cost of production. The goal is to eliminate competitors and establish a monopoly or dominant market position. Here are a few examples of predatory pricing:

1. Airlines: In the airline industry, larger carriers may engage in predatory pricing to eliminate smaller competitors. They may temporarily lower ticket prices on specific routes to a level that smaller airlines cannot match, leading to their exit from the market. Once the competition is eliminated, the dominant airline can raise prices to recoup losses.

2. Retail: Large retail chains may engage in predatory pricing to drive out smaller local retailers. They can afford to sell products at a loss for a period, undercutting the prices of smaller competitors. Once the local retailers are forced out of business, the dominant chain can raise prices and regain market control.

3. Technology: In the technology sector, companies may engage in predatory pricing to eliminate potential rivals. For example, a dominant software company may offer its product for free or at a significantly lower price than its competitors. This strategy aims to discourage new entrants and maintain market dominance.

4. Pharmaceuticals: In the pharmaceutical industry, a company with a patent on a drug may engage in predatory pricing to eliminate generic competitors. By temporarily lowering the price of the branded drug, they can make it financially unviable for generic manufacturers to compete. Once the competition is eliminated, the company can raise prices back to their original levels.

5. Utilities: In regulated industries like utilities, a dominant provider may engage in predatory pricing to discourage new entrants. By temporarily lowering prices, they can make it difficult for new competitors to enter the market and establish themselves. Once the competition is deterred, the dominant provider can raise prices without fear of losing customers.

It is important to note that proving predatory pricing can be challenging, as it requires demonstrating the intent to eliminate competition rather than simply engaging in aggressive pricing strategies. Antitrust laws and regulatory bodies exist to prevent and penalize predatory pricing practices to ensure fair competition in the market.