The correct answer is B) Doormart signed an agreement with Wallmart allowing both firms to engage in predatory pricing.
Wallmart is accused of predatory pricing by Doormart. Wallmart could defend itself against this accusation. The option that would not be one of their arguments would be "Doormart signed an agreement with Wallmart allowing both firms to engage in predatory pricing."
This option would be inconceivable because laws and regulations prohibit companies to sign an agreement that could be against the benefits of the American consumer. A situation like that could seem like an agreement "behind doors" that also hampers or hurts other competitors in the industry. Predatory pricing is an illegal practice aimed at eliminating other competitors in the market by setting very low prices. Something like this could create monopolies.
Answer:
The answer is option B)Doormart signed an agreement with Wallmart allowing both firms to engage in predatory pricing.
Explanation:
Predatory pricing is the pricing of goods or services at such a low level that other firms cannot compete and are forced to leave the market.
pricing strategy in which a company prices a product or service artificially low to gain new customers, drive competitors out of the market, or create barriers to entry for new potential competitors.
If Wallmart is accused of predatory pricing by Doormart. Wallmart will not defend itself against this accusation by signing an agreement with Wallmart allowing both firms to engage in predatory pricing because it goes against their intention for undercutting pricing in the first place.
